1Y vs 10Y Treasury Yield
US 1Y Treasury yield (FRED DGS1) approximately 3.85 percent (April 2026). US 10Y Treasury yield (FRED DGS10) 4.31 percent.
Also known as: 1Y Treasury Yield (1Y yield, 1 year treasury) · 10Y Treasury Yield (10Y yield, 10 year treasury, TNX)
Why This Comparison Matters
US 1Y Treasury yield (FRED DGS1) approximately 3.85 percent (April 2026). US 10Y Treasury yield (FRED DGS10) 4.31 percent. 1s10s spread approximately 46 basis points (positive, normal-shaped). The 1s10s spread is classic recession-signal curve. 1Y reflects near-term Fed policy expectations (Fed funds 3.50-3.75 percent + ~10bp term premium). 10Y captures growth + long-run inflation expectations + term premium. When 1Y exceeds 10Y (inversion), markets expect immediate Fed tightness coupled with weak long-run growth - classic pre-recession setup. April 2026 spread positive 46bp suggests no recession-imminent signal.
The April 2026 Configuration
1Y Treasury 3.85% (April 2026); 10Y Treasury 4.31%. 1s10s spread 46bp (positive, normal-shaped).
Fed funds rate 3.50-3.75% (paused since December 2024). 1Y trades close to Fed funds + small term premium.
10Y captures: short-end policy + long-run inflation (~2-2.5% target adjusted) + term premium (60-100bp).
2022-2023 inversion: 1s10s went deeply negative to -110bp (March 2023 trough). Recession signal.
2024-2026: re-steepened from -110bp to current +46bp.
How 1s10s Captures Recession Risk
1s10s inversion (1Y > 10Y) is classic recession signal. Mechanism: Fed hikes raise 1Y; long-run inflation/growth expectations cap 10Y. Inversion signals: market expects Fed eventual cuts; growth expectations weak; recession-imminent.
Historical record: every US recession since 1969 preceded by 1s10s inversion (or close cousin 2s10s inversion). Lead time 6-24 months from inversion to recession.
2022 inversion: 1s10s went deeply negative March 2023 trough -110bp. Sahm Rule triggered July 2024. No recession yet (anomalous - longest sustained Sahm trigger in 54-year history).
April 2026: 1s10s +46bp positive. Recession signal removed. But Sahm Rule still triggered.
Curve Steepening Dynamics
2024-2026 re-steepening: from -110bp (March 2023) to +46bp (April 2026). Drivers.
Fed cuts compressed 1Y. Fed cut from 5.50% to 3.50-3.75% in 2024. 1Y followed.
10Y elevated. Fiscal trajectory + inflation expectations + term premium expansion kept 10Y at 4.0-5.0% range.
The practical implication: 1s10s steepening reflects Fed cuts + sticky long-end. Normal recovery curve. Continued Fed cuts would steepen further. Fed hikes would re-flatten.
How the Pair Performs Through Cycles
Late-cycle: 1s10s flattens as Fed hikes raise 1Y. Long-end stable.
Recession-imminent: 1s10s inverts (1Y above 10Y). 2022-2023 prototype.
Recession + Fed cuts: 1s10s steepens dramatically as 1Y compresses. Long-end stable.
Recovery: 1s10s very steep (Fed at zero, long-end normal).
Mid-cycle: 1s10s 50-100bp.
April 2026: 46bp. Mid-cycle reading.
How the Pair Performs in Stress
2007-2008: 1s10s inverted briefly. Then steepened dramatically as Fed cut to 0%.
2018-2019: 1s10s flattened to negative briefly (December 2018-January 2019).
2020 COVID: Fed cuts to 0%. 1s10s steepened.
2022-2023 hiking: 1s10s deeply inverted (-110bp). Most extreme inversion since 1981.
2024-2026: re-steepened to +46bp.
Pattern: 1s10s inverts before recessions; steepens during/after.
Volatility and Trading
10Y vol 80-150bp annualized. 1Y vol smaller (50-100bp). 1s10s spread vol 30-60bp.
10Y exposure: TLT, IEF, 10Y futures. 1Y exposure: SHV (1-3 month T-bill), BIL (1-3 month), 1Y futures.
Curve trade: long 10Y / short 1Y (steepener) or short 10Y / long 1Y (flattener).
April 2026: long steepener active (positive carry from 1s10s spread).
Reading the Pair as a Trading Tool
1s10s > 100bp: very steep. Recovery regime.
1s10s 50-100bp (current April 2026): typical regime.
1s10s 0-50bp: flat. Late-cycle.
1s10s < 0 (inverted): recession-imminent. 2022-2023 prototype.
April 2026: 46bp positive. Mid-cycle. Watch for further steepening on Fed cuts.
How 1s10s Compares to Other Curves
Vs 2s10s: similar but 1Y more rate-sensitive than 2Y. 1s10s slightly more volatile.
Vs T10Y3M: 3M is very short-end. T10Y3M tends to invert later than 1s10s but is more reliable recession indicator.
Vs 5s30s: pure term premium. Different signal.
April 2026: 1s10s 46bp; 2s10s ~50bp; T10Y3M ~63bp. All positive.
Forward Path
1Y 3.85%; 10Y 4.31%; 1s10s 46bp. Fed paused 3.50-3.75%.
Forward: Fed cuts compress 1Y. 1s10s steepens further. Fed hikes raise 1Y. 1s10s flattens.
Key watches: Fed FOMC; inflation prints; growth indicators; Treasury auction demand.
The Recession Signal Cleanup
2022-2023 inversion was longest sustained recession signal in modern history. Yet no recession as of April 2026 (Sahm Rule 21+ months without recession). Why?
Labor force expansion: immigration + re-entry added 3-4M workers. Unemployment can rise from labor force growth (denominator) not employment loss (numerator).
Fiscal support: ongoing federal spending offset Fed tightness.
AI capex: hyperscaler $400B+ annual capex provided economic boost.
The practical implication: 2022-2023 inversion may be most clear-cut false signal in 50+ years. April 2026 1s10s normalized to +46bp removes inversion signal.
Conditional Forward Response (Tail Events)
How 10Y Treasury Yield has historically behaved in the 5 sessions following a top-decile or bottom-decile daily move in 1Y Treasury Yield. Computed from 1,246 aligned daily observations ending .
Following these triggers, 10Y Treasury Yield rises 1.07% on average over the next 5 sessions, versus an unconditional baseline of +0.50%. 125 qualifying events; 10Y Treasury Yield closed positive in 56% of them.
Following these triggers, 10Y Treasury Yield rises 0.55% on average over the next 5 sessions, versus an unconditional baseline of +0.50%. 125 qualifying events; 10Y Treasury Yield closed positive in 50% of them.
Past behavior in the tails is descriptive, not predictive. Mean response is the simple arithmetic mean of compounded 5-day forward returns following each trigger event; baseline is the unconditional mean across the full sample window. Edge measures the gap between the two.
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Frequently Asked Questions
What is the current 1s10s spread and what does it signal?+
As of April 2026, the 1Y Treasury yields approximately 3.85 percent and the 10Y Treasury yields 4.31 percent, putting the 1s10s spread at approximately 46 basis points positive. This is a normal-shaped curve at a mid-cycle reading. The recession signal that came from the 2022-2023 deep inversion (which troughed at minus 110 basis points in March 2023) has been removed. Within the framework, 1s10s above 100bp is very steep and characteristic of recovery regimes; 50 to 100bp is typical mid-cycle; 0 to 50bp signals late-cycle flattening; below zero is the classic recession-imminent inversion. The current 46bp print sits at the lower edge of typical mid-cycle.
Why did the 2022-2023 inversion not produce a recession?+
The 2022-2023 1s10s inversion was the longest sustained recession signal in modern history, troughing at minus 110 basis points in March 2023 (the most extreme inversion since 1981). Yet as of April 2026, no recession has materialized, with the Sahm Rule triggered for 21-plus months without a downturn (the longest sustained Sahm trigger in 54-year history). Three factors offset the signal: labor force expansion through immigration and re-entry added three to four million workers, so unemployment could rise from denominator effects rather than employment loss; ongoing federal fiscal support offset Fed tightness; and AI capex from hyperscalers running 400 billion dollars-plus annually provided a structural economic boost. The episode may be the most clear-cut false signal in 50-plus years.
How did 1s10s steepen from minus 110bp to plus 46bp?+
The 2024-2026 re-steepening from the March 2023 minus 110 basis point trough to the current plus 46 basis points reflects a swing of approximately 156 basis points. The mechanics are straightforward: Fed cuts compressed the 1Y yield as the Fed cut the policy rate from 5.50 percent down to 3.50 to 3.75 percent across 2024, and the 1Y followed the policy path closely. The 10Y stayed elevated in the 4.0 to 5.0 percent range through this period, supported by fiscal trajectory concerns, sticky long-run inflation expectations, and term premium expansion. The result is a normal recovery curve. Continued Fed cuts would steepen further; Fed hikes would re-flatten.
How does 1s10s compare to 2s10s and T10Y3M as recession signals?+
All three Treasury curve spreads are recession signals with overlapping but distinct characteristics. 1s10s is similar to 2s10s but slightly more volatile, because the 1Y is more rate-sensitive than the 2Y. T10Y3M (10Y minus 3-month) tends to invert later than 1s10s but has historically been the more reliable recession indicator. 5s30s captures pure term premium and signals something different from the recession-leaning curves. As of April 2026, all three are positive: 1s10s at 46 basis points, 2s10s at approximately 50 basis points, and T10Y3M at approximately 63 basis points. The recession-imminent inversion signal that was present in 2022-2023 has now been removed across the entire short-to-long curve.
How is 1s10s used as a trading tool?+
The 1s10s spread is traded as a curve view through long 10Y / short 1Y (steepener) or short 10Y / long 1Y (flattener) positions. Common exposure instruments are TLT, IEF, or 10Y futures on the long-end leg, and SHV, BIL, or 1Y futures on the short-end leg. Volatility expectations: 10Y vol runs 80 to 150 basis points annualized, 1Y vol smaller at 50 to 100 basis points, and 1s30s spread vol 30 to 60 basis points. As of April 2026, a long-steepener position is the active trade with positive carry from the 46 basis point spread. The forward path depends on Fed FOMC decisions, inflation prints, growth indicators, and Treasury auction demand.
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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.