Regional Banks (KRE) vs 10Y-2Y Curve
Live side-by-side comparison with current values, changes, and key statistics.
Why This Comparison Matters
Regional banks are more NIM-sensitive than money-center banks because they lack trading revenues. Curve steepening supports KRE strongly. Curve inversion pressures KRE. The 2023 regional banking stress showed KRE collapsing during curve inversion alongside deposit flight, highlighting both NIM and credit risk interactions.
Cross-Asset Analysis
To orient the reader: Regional Banks (KRE) represents SPDR S&P Regional Banking ETF, credit cycle indicator and 10Y-2Y Yield Spread represents spread between 10-year and 2-year Treasury yields, classic recession signal when inverted, which is why this comparison sits in the cross asset pair category on Convex. The connection between Regional Banks (KRE) and 10Y-2Y Yield Spread runs through shared macro drivers, and isolating the spread distinguishes common factors from idiosyncratic noise. Regime identification based on Regional Banks (KRE)-10Y-2Y Yield Spread can be feedback-driven, because extreme spread values often resolve via mean reversion or regime change.
Watching Regional Banks (KRE) alongside 10Y-2Y Yield Spread gives insight into how macro factors transmit across different parts of the global market structure. Regional Banks (KRE) belongs to the Equity Sector space, and 10Y-2Y Yield Spread belongs to Yield Curve & Rates, and the interaction between those two worlds is where the relevant macro information resides. Analysts combine Regional Banks (KRE) with 10Y-2Y Yield Spread to build cross-asset indicators that are more difficult to game than any single-market series.
Real yields, liquidity conditions, and the dollar underlie most cross-asset relationships, and when these change Regional Banks (KRE) and 10Y-2Y Yield Spread both respond at varying speeds. The Equity Sector and Yield Curve & Rates segments share underlying drivers but differ in sensitivity, and the Regional Banks (KRE)-10Y-2Y Yield Spread spread captures those sensitivities.
90-Day Statistics
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Frequently Asked Questions
What is the relationship between Regional Banks (KRE) and 10Y-2Y Yield Spread?+
Regional Banks (KRE) and 10Y-2Y Yield Spread are connected through shared macro drivers across asset classes. When the dominant macro driver shifts, both respond, though with different sensitivities and at different speeds. The spread between Regional Banks (KRE) and 10Y-2Y Yield Spread captures the specific macro signal that flows through this relationship.
When does Regional Banks (KRE) typically lead 10Y-2Y Yield Spread?+
Regional Banks (KRE) tends to lead 10Y-2Y Yield Spread during macro regime changes, where the more liquid asset moves first. In those periods, moves in Regional Banks (KRE) precede corresponding moves in 10Y-2Y Yield Spread by days to weeks, depending on the transmission channel and the depth of each market.
How are Regional Banks (KRE) and 10Y-2Y Yield Spread historically correlated?+
Long-run correlation between Regional Banks (KRE) and 10Y-2Y Yield Spread varies by regime. Cross-asset correlations vary by regime, tending to tighten in stress and loosen during normal conditions. 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 Regional Banks (KRE)-10Y-2Y Yield Spread relationship.
What macro conditions drive divergence between Regional Banks (KRE) and 10Y-2Y Yield Spread?+
Divergence between Regional Banks (KRE) and 10Y-2Y Yield Spread typically arises from idiosyncratic shocks in one asset, policy interventions, or structural shifts in demand. 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 Regional Banks (KRE) or 10Y-2Y Yield Spread.
Is Regional Banks (KRE) a hedge for 10Y-2Y Yield Spread?+
Cross-asset hedges between Regional Banks (KRE) and 10Y-2Y Yield Spread work when the macro drivers of the two assets are sufficiently decorrelated, which depends on the regime and therefore needs to be reviewed as conditions change. Effective hedging requires matching the hedge to the specific risk being protected, and the Regional Banks (KRE)-10Y-2Y 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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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.