Scenario × Asset Analysis

What Happens to 10Y-3M Yield Spread When Energy CPI Spikes?

What happens when energy CPI spikes 20%+ year-over-year? Consumer spending impact, inflation expectations, and recession risk from energy shocks.

10Y-3M Yield Spread

55 bps

as of Apr 14, 2026

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Trigger: CPI: Energy

314.02

Condition: rises above 20% year-over-year

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How 10Y-3M Yield Spread Responds

When Energy CPI Spikes, 10Y-3M Yield Spread typically responds to the changing macro environment. Spread between 10-year Treasury and 3-month T-bill, Fed's preferred recession indicator. This scenario is particularly relevant for yield curve & rates because changes in CPI: Energy directly influence the macro environment for 10Y-3M Yield Spread. Investors should monitor both the trigger condition and 10Y-3M Yield Spread's response to position accordingly.

Scenario Background

Energy CPI measures the price change of energy goods (gasoline, fuel oil) and services (electricity, natural gas) in the Consumer Price Index. Energy has historically been the most volatile CPI component, with YoY changes swinging between -30% and +50% in recent decades. A spike above 20% YoY typically signals either geopolitical oil shocks or sharp supply constraints.

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Historical Context

Energy CPI peaked at 41.6% YoY in June 2022 following the Ukraine invasion and OPEC production cuts. Other historical peaks: 49% in 1979-80, 33% in 1990 (Gulf War), 30% in 2008, and -20% in 2009 (demand destruction). The 2014-2016 oil collapse produced -20% energy CPI readings. Post-COVID reopening saw energy CPI swing from -20% (2020) to +41% (2022) within 24 months.