What this actually is
What the US government pays to borrow. The two-year yield mostly reflects where investors think the Fed's rate will be over the next couple of years. The ten-year reflects longer-run growth, inflation, and how much extra return investors demand for locking money up.
Why it matters to a person
The ten-year is the reference price for the whole economy: mortgage rates track it, corporate borrowing costs are priced off it, and pension funds discount their liabilities with it. It is also the competition for stocks — when a risk-free government bond pays 5%, a stock has to offer more than that to be worth owning.
For scale
Fell from 15% in 1981 to 0.5% in 2020 — a forty-year bull market in bonds. Rose above 5% in 2023 for the first time since 2007. The 1960s–2000s average was around 6%.
How to read a release
Reading it
Ask why it moved. Rising because growth is strong is benign for stocks. Rising because inflation or government borrowing scares people is not. The 2-year versus 10-year gap tells you which story the bond market believes.
The mechanism
The 2-year is the Fed path, the 10-year is growth plus term premium; equities are priced off both.
What to watch: Daily yield curve rates. Arrives continuous; the effect typically lasts weeks. Impact tier 2 — Directional: Moves the index for days or weeks. Scheduled data releases, policy decisions, global spillovers, and the prices of money and energy. This is the tier most professional attention is spent on.
Its neighbourhood
Everything this entry connects to directly. Click any point to follow it.
What it moves next
Documented transmission: when this moves, these tend to move after it.
What moves it
Dials it feeds
This factor is one input to a composite reading on the Analytics page.