Economic Blog
It may be a year or more before the end of the recession is officially called, but gauging from the growth we’ve seen since April, it may already be over. If that’s true, it’s a good time to take a look at what US Treasury yields do early in a new economic cycle. As shown in the LPL Chart of the Day, in the last seven recessions, dating back to 1970, the difference between the 10-year Treasury and 3-month Treasury yield, referred to as a yield spread, at peak has been at least 2% every time—and above 3% in the last four recessions. (Looking at the spread between the 10-year and the 3-month Treasury makes it easier to compare times when the absolute rate level was different.) Continue reading →