Probability of U.S. Recession Calculated from the Yield Curve The probability of a U.S. recession in 12 months, calculated from the yield curve, stands at 25.0% in May. Image: Federal Reserve Bank of Cleveland
U.S. 10Y-2Y Yield Curve While a steepening inverted yield curve has historically warned of recession, persistent economic strength could mean a more positive outlook for U.S. equities in 2025—though this would mark a notable break from the past. Image: Deutsche Bank
U.S. 10Y-3M Yield Curve While a steepening inverted yield curve has historically served as a warning sign for U.S. recessions, its predictive power may be less definitive in this cycle. Image: J.P. Morgan
U.S. 2s10s Yield Curve and Consensus Probability of a U.S. Recessions in the Next 12 Months Although fears of a U.S. recession have been mounting, the 2s10s U.S. Treasury yield curve’s recent steepening suggests a more optimistic economic outlook. Image: Deutsche Bank
U.S. 10Y-3M Yield Curve For the first time since 2022, yields on U.S. 10-year Treasury notes have surpassed those of three-month bills, indicating a potentially positive outlook for U.S. stocks, particularly when a recession is avoided. Image: Bloomberg
U.S. 10Y-2Y Yield Curve Slope The U.S. 2s10s yield curve has inverted again, reflecting investor sentiment and expectations about future economic conditions. Image: The Daily Shot
S&P 500 and U.S. 2s-10s Yield Curve Since the late 1950s, 10 of the last 12 yield curve steepening cycles have coincided with U.S. recessions, highlighting the yield curve’s effectiveness as a predictor of economic downturns. Image: BofA Global Research
Percent of 10 Yield Curves Inverted Historically, inverted yield curves have successfully anticipated every recession in the United States, highlighting their importance as an economic indicator. Will this time be an exception? Image: Real Investment Advice
U.S. 10Y-2Y Yield Curve and Recessions When a recession is avoided, an un-inversion in the 2s10s U.S. Treasury yield curve may suggest a favorable outlook for U.S. stocks. Image: Goldman Sachs Global Investment Research
Median Path of S&P 500 Around Un-Inversion in the 2s10s U.S. Treasury Yield Curve An un-inversion in the 2s10s U.S. Treasury yield curve can suggest a positive outlook for U.S. stocks, if a recession is avoided. Image: Goldman Sachs Global Investment Research
Yield Curve vs. VIX (Leading Indicator) Should U.S. equity investors anticipate increased volatility ahead, given that the yield curve typically leads the VIX by three years? Image: BofA US Equity & Quant Strategy