10Y-2Y Treasury Spread Drops to +25 bp, Its Thinnest Reading This Year
As seen on the 24/7 Wall St. homepage on November 11, 2026.
The curve is flattening toward zero again: the 10Y-2Y spread gave up 7 basis points to +25 bp, still positive but thinner than at any point this year. Banks, long-duration bonds and anything priced off the recession signal feel this first.
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At +25 basis points, the 10-year minus 2-year Treasury spread, the bond market's most-watched recession gauge, is thin enough that another week of similar moves would push it back to zero.
The spread has given back roughly half of its earlier peak this year, and that pace of compression signals the market is repricing rate-cut expectations or growth risk faster than many investors anticipated.
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A flatter curve squeezes bank net interest margins, the profit earned on loans funded by deposits, and tends to weigh on lending profitability. Long-duration bond holders get the opposite effect, since falling long yields lift prices on existing long bonds.
If the spread crosses back below zero after spending most of this year positive, it would mark a reinversion and reignite recession-signal debates across fixed income and equity markets. The FRED series T10Y2Y from the St. Louis Fed is the standard daily reference.