What the U.S. Treasury Yield Curve Looks Like Now

Many people were alarmed by the word inversion and thought a recession was imminent. But the U.S. Treasury yield curve is no longer inverted.

First, the actual data—as of the close on August 5, 2026

Two-year yield: 4.18%.

10-year yield: 4.63%.

10Y–2Y spread: +45 basis points.

30-year yield: 5.17%.

The curve now slopes upward normally from short to long maturities: the 30-year yield is highest and the three-month yield lowest. Long-term yields are clearly above short-term yields.

What does an inverted yield curve mean?

Normally, lending for longer earns a higher return, so the curve slopes upward. Inversion means that short-term yields exceed long-term yields—for example, the two-year yield is above the 10-year yield. It usually indicates greater concern about short-term risks or expectations that growth will weaken.

What happened in the previous inversion?

From July 2022 to August 2024, the 2Y–10Y spread remained inverted for 537 trading days and reached a low of −108 basis points. In other words, the 10-year yield was more than one percentage point below the two-year yield.

That inversion was a prominent recession-warning signal. But history shows that inversion does not mean an immediate recession. There is often a delay of several months or more than a year, and markets can move back and forth.

Why is it no longer inverted?

The end of inversion means expectations are gradually shifting from a focus on short-term risk towards more normal pricing across maturities. Put simply, markets do not currently believe the U.S. economy is sliding. Instead, they expect policy rates to ease gradually from high levels, with inflation pressures also under control.

Of course, this does not mean there are no risks. The shape of the curve can change, and today's shape does not guarantee tomorrow's.

Three points to remember

Inversion is a signal about expectations, not a countdown to collapse.

The inversion that ended in August 2024 is over.

The curve currently slopes upward normally, but maturity spreads still need monitoring.