5Y vs 2Y Treasury Yield
Live side-by-side comparison with current values, changes, and key statistics.
Why This Comparison Matters
The 5Y-2Y spread captures the market's expectations for Fed policy over the next 3 years. When the 5Y is well above the 2Y, the market expects rates to stay elevated or rise. When it inverts, the market is pricing in rate cuts within the next 2-3 years. This is a more granular signal than the popular 10Y-2Y spread.
Cross-Asset Analysis
This page pairs 5Y Treasury Yield (yield on 5-year US Treasury constant maturity securities) against 2Y Treasury Yield (yield on 2-year US Treasury, key Fed expectations proxy) to surface the specific macro signal that lives in the yield curve pair relationship. 5Y Treasury Yield versus 2Y Treasury Yield reads as a cleaner diagnostic than either yield alone, because the spread strips common-factor duration risk and leaves the relative repricing visible. Term premium reconstitution, especially after periods of suppressed volatility, shows up disproportionately in 2Y Treasury Yield and generates spread moves that rate-expectations models do not capture. Macro funds combine the 5Y Treasury Yield-2Y Treasury Yield spread with inflation breakevens and dollar positioning to build multi-factor rate views that survive regime shifts better than outright duration bets.
Duration traders implement views on the 5Y Treasury Yield-2Y Treasury Yield basis through curve flatteners and steepeners, sized against the historical volatility of the spread. 5Y Treasury Yield anchors more heavily to the expected policy path, whereas 2Y Treasury Yield picks up more term premium and structural supply-demand pressure. In a growth-led expansion, the 5Y Treasury Yield-2Y Treasury Yield spread typically steepen; in disinflation and late-cycle tightening it often flattens and can invert. Late-cycle environments force 5Y Treasury Yield to track the policy peak while 2Y Treasury Yield starts discounting the eventual easing, producing the classic inversion that coincides with tighter financial conditions.
90-Day Statistics
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Frequently Asked Questions
What is the relationship between 5Y Treasury Yield and 2Y Treasury Yield?+
5Y Treasury Yield and 2Y Treasury Yield 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 5Y Treasury Yield and 2Y Treasury Yield captures the specific macro signal that flows through this relationship.
When does 5Y Treasury Yield typically lead 2Y Treasury Yield?+
5Y Treasury Yield tends to lead 2Y Treasury Yield during policy regime shifts, where the short end moves before the long end reprices. In those periods, moves in 5Y Treasury Yield precede corresponding moves in 2Y Treasury Yield by days to weeks, depending on the transmission channel and the depth of each market.
How are 5Y Treasury Yield and 2Y Treasury Yield historically correlated?+
Long-run correlation between 5Y Treasury Yield and 2Y Treasury Yield 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 5Y Treasury Yield-2Y Treasury Yield relationship.
What macro conditions drive divergence between 5Y Treasury Yield and 2Y Treasury Yield?+
Divergence between 5Y Treasury Yield and 2Y Treasury Yield 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 5Y Treasury Yield or 2Y Treasury Yield.
Is 5Y Treasury Yield a hedge for 2Y Treasury Yield?+
Within the Treasury curve, 5Y Treasury Yield is not typically a hedge for 2Y Treasury Yield; 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 5Y Treasury Yield-2Y Treasury Yield pair is best stress-tested under scenarios the investor most worries about before being sized into a real portfolio.
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Data sourced from FRED, CoinGecko, CBOE, and other providers. This page is for informational purposes only and does not constitute financial advice. Past performance does not guarantee future results.