Where are We in the Cycle?

Where are We in the Cycle?

Where are We in the Cycle?

Where are We in the Cycle?

10- Year Treasury Minus 2-Year Treasury

Where are we in the cycle?
  • The business cycle is difficult to predict as there are many moving parts
  • But, a pretty good indicator is available by monitoring 10-year treasury yields minus 2-year treasuries
  • This difference has predicted at least five recessions over the last 40 years
  • When 10-year treasuries go negative against 2-year treasuries, a recession usually occurs within the short term (generally, 10-15 months later)
  • Over the last couple of years, this dynamic has trended lower and now stands at its lowest point since the recession of 2008/09

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