10Y Treasury vs 10Y-3M Spread
Live side-by-side comparison with current values, changes, and key statistics.
Why This Comparison Matters
The 10Y minus 3M spread is the NY Fed's preferred recession model input. Pairing the 10Y level with this spread reveals whether curve movements come from shifts in growth expectations (10Y) or Fed policy (3M bills). Deep inversion with a falling 10Y signals aggressive growth-cut expectations.
Cross-Asset Analysis
Before getting to the spread, note what each leg actually represents: 10Y Treasury Yield is yield on 10-year US Treasury, the global risk-free benchmark, and 10Y-3M Yield Spread is spread between 10-year Treasury and 3-month T-bill, Fed's preferred recession indicator. Rate repricing flows through 10Y Treasury Yield and 10Y-3M Yield Spread at different speeds, with the shorter-dated leg adjusting first to FOMC communication and the longer-dated leg integrating slower-moving macro fundamentals. 10Y Treasury Yield compared with 10Y-3M Yield Spread reads as a cleaner indicator than either yield alone, because the spread removes common-factor duration risk and leaves the relative repricing visible. 10Y Treasury Yield anchors more heavily to the expected policy path, and 10Y-3M Yield Spread picks up more term premium and structural supply-demand pressure. Dealer balance sheet limits and primary market calendar effects introduce liquidity-driven noise into the 10Y Treasury Yield-10Y-3M Yield Spread spread that ignores macro fundamentals.
Term premium reconstitution, especially after periods of suppressed volatility, shows up disproportionately in 10Y-3M Yield Spread and generates spread moves that rate-expectations models do not forecast. The 10Y Treasury Yield-10Y-3M Yield Spread pair isolates a section of the Treasury curve, and the gap between them reflects market-implied expectations that single-point yields cannot surface. The 10Y Treasury Yield-10Y-3M Yield Spread relationship can dislocate during repo stress, Treasury auction pressure, and foreign reserve outflows, each of which distorts one leg without changing the underlying macro story.
90-Day Statistics
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Frequently Asked Questions
What is the relationship between 10Y Treasury Yield and 10Y-3M Yield Spread?+
10Y Treasury Yield and 10Y-3M Yield Spread are connected through the Treasury yield curve and monetary policy expectations. When the policy rate path shifts, both respond, though with different sensitivities and at different speeds. The spread between 10Y Treasury Yield and 10Y-3M Yield Spread captures the specific macro signal that flows through this relationship.
When does 10Y Treasury Yield typically lead 10Y-3M Yield Spread?+
10Y Treasury Yield tends to lead 10Y-3M Yield Spread during policy regime shifts, where the short end moves before the long end reprices. In those periods, moves in 10Y Treasury Yield precede corresponding moves in 10Y-3M Yield Spread by days to weeks, depending on the transmission channel and the depth of each market.
How are 10Y Treasury Yield and 10Y-3M Yield Spread historically correlated?+
Long-run correlation between 10Y Treasury Yield and 10Y-3M Yield Spread varies by regime. Yields at different maturities are typically positively correlated in direction but differ in magnitude, which is what makes the spread informative. The correlation is not stable: it shifts with macro conditions, and the periods when it breaks down are often the most informative moments in the 10Y Treasury Yield-10Y-3M Yield Spread relationship.
What macro conditions drive divergence between 10Y Treasury Yield and 10Y-3M Yield Spread?+
Divergence between 10Y Treasury Yield and 10Y-3M Yield Spread typically arises from quantitative easing, quantitative tightening, foreign reserve flows, or term premium dislocations. When one asset's idiosyncratic drivers dominate, the spread moves in ways that the common macro story does not predict, which is usually a signal to look more carefully at the specific drivers at work in 10Y Treasury Yield or 10Y-3M Yield Spread.
Is 10Y Treasury Yield a hedge for 10Y-3M Yield Spread?+
Within the Treasury curve, 10Y Treasury Yield is not typically a hedge for 10Y-3M Yield Spread; they are both duration exposures with different convexity and roll characteristics. Effective hedging requires matching the hedge to the specific risk being protected, and the 10Y Treasury Yield-10Y-3M Yield Spread pair is best stress-tested under scenarios the investor most worries about before being sized into a real portfolio.
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