10Y Treasury vs 10Y-3M Spread
The 10-year Treasury yield closed at 4.31 percent on April 24, 2026, and the 3-month T-bill at 3.68 percent, putting the T10Y3M spread at 63 basis points. The pair shows the 10Y level alongside the famous NY Fed recession-probability spread.
Also known as: 10Y Treasury Yield (10Y yield, 10 year treasury, TNX) · 10Y-3M Yield Spread (10y 3m spread)
Why This Comparison Matters
The 10-year Treasury yield closed at 4.31 percent on April 24, 2026, and the 3-month T-bill at 3.68 percent, putting the T10Y3M spread at 63 basis points. The pair shows the 10Y level alongside the famous NY Fed recession-probability spread. Where the 10Y level reveals where the long end of the curve is anchored, the T10Y3M spread reveals whether the front-end Fed policy stance is restrictive (inverted) or accommodative (positive) relative to long-end expectations. The current 63 bp positive T10Y3M spread is the highest since the curve reverted from inversion in late 2024 and has fully exited the recession-warning zone that prevailed from late 2022 through mid-2024.
The April 2026 Configuration
The April 2026 readings: 10Y at 4.31 percent, 3M T-bill at 3.68 percent, T10Y3M spread at 63 basis points. The 3M yield sits within 7 basis points of the upper bound of the fed funds range (3.50 to 3.75 percent), reflecting normal money-market arbitrage. The T10Y3M spread of 63 bps is well above the January 16, 2026 reading of 51 bps, indicating modest steepening through Q1 2026.
The steepening is consistent with three drivers: the Iran war oil-driven reflation supporting the long end, modest fiscal-deficit term premium accumulation, and the absence of fresh recession signals that would compress the long end. The 10Y has held a relatively narrow range of 4.20 to 4.50 percent through April, while the 3M has been similarly narrow at 3.65 to 3.75 percent.
Why T10Y3M Is the NY Fed Recession Model
The T10Y3M spread (10-year Treasury yield minus 3-month T-bill yield) is the spread used by the NY Fed for its monthly recession-probability model published since the early 1990s. The model produces a 12-month-forward recession probability based on the spread's level and historical relationship to NBER-dated US recessions.
The spread has preceded each of the last eight US recessions with inversion (spread below zero) producing a recession within 6 to 18 months. The 2022 to 2024 inversion (T10Y3M went negative in October 2022, peaked at minus 188 bps in May 2023, returned to positive in December 2024) is the longest sustained inversion in the model's history. The fact that recession did not materialize during this inversion is the central recent debate in macro forecasting. Many factors have been proposed: COVID-related labor supply disruption, fiscal stimulus persistence, AI capex offsetting tightening, wealth-effect support from equity markets at all-time highs.
How the 10Y Level Adds Context
Conditional Forward Response (Tail Events)
How 10Y-3M Yield Spread has historically behaved in the 5 sessions following a top-decile or bottom-decile daily move in 10Y Treasury Yield. Computed from 1,228 aligned daily observations ending .
Following these triggers, 10Y-3M Yield Spread rises 12.62% on average over the next 5 sessions, versus an unconditional baseline of +28.74%. 123 qualifying events; 10Y-3M Yield Spread closed positive in 39% of them.
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Frequently Asked Questions
What are the current 10Y yield and T10Y3M spread?+
The 10-year Treasury yield closed at 4.31 percent on April 24, 2026, and the 3-month T-bill at 3.68 percent, putting the T10Y3M spread at 63 basis points. The 3M sits within 7 basis points of the upper bound of the fed funds range (3.50 to 3.75 percent). The 63 bp positive T10Y3M spread is the highest since the curve reverted from inversion in December 2024 and has fully exited the recession-warning zone that prevailed from late 2022 through mid-2024. The spread has steepened from 51 bps in mid-January 2026 to 63 bps in April 2026.
Why does the NY Fed use T10Y3M for recession probability?+
The NY Fed model has used T10Y3M since the early 1990s based on Estrella and Mishkin research showing T10Y3M outperforms T10Y2Y in out-of-sample recession forecasting. Three reasons: 3M T-bill is the closest market-traded proxy for current monetary policy stance, the historical 3M data series is consistent and clean (fed funds measurement has changed over decades), and T10Y3M captures pure Fed-policy stance versus market expectations 2 years out. The Cleveland Fed yield curve recession model also uses T10Y3M. The spread has preceded each of the last 8 US recessions with inversion producing a recession within 6 to 18 months.
What did the 2022-2024 inversion show?+
T10Y3M inverted in October 2022 with the Fed mid-hiking-cycle. The inversion peaked at minus 188 bps in May 2023, the deepest inversion in the model's history. The inversion held 26 months from October 2022 through December 2024 (longest sustained inversion ever) without producing recession. T10Y3M returned to positive in December 2024 and has steepened steadily since. The NY Fed recession-probability model peaked at approximately 70 percent during the deepest inversion in May 2023. The model now reads approximately 5 to 8 percent recession probability over the next 12 months, the lowest since 2022.
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