The Treasury Update Podcast Reading the Curve: Decoding the 10-Year Yield
Aug 5, 2025
In this discussion, Paul Galloway, a Senior Advisor at Strategic Treasurer, delves into the complexities of the yield curve and 10-year treasury yield. He unpacks the current market uncertainty and its implications for interest rates and inflation. Galloway emphasizes how a flat yield curve could signal recession risks and affect borrowing costs. Additionally, he shares insights on the impact of geopolitical factors on investor behavior, making it a compelling listen for anyone interested in the financial landscape.
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What The Yield Curve Shows
- The yield curve plots bond yields across maturities to show market expectations of growth and inflation.
- An upward slope signals confidence while a downward slope can presage recession risk.
Why The 10-Year Matters
- The 10-year yield is a market benchmark reflecting expectations for future rates, inflation, and growth.
- It influences mortgage, corporate, and other borrowing costs across the economy.
2s-10s Spread As A Litmus Test
- The 2s-10s spread signals investor sentiment: positive spread shows expected growth, negative spread signals recession fears.
- An inverted curve indicates flight to safety and stronger near-term risk perceptions.