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Read a Treasury yield curve by checking which curve series and date you are looking at, then comparing yields at named maturities. An upward slope means longer maturities yield more than shorter ones; a flat or inverted section means that gap has narrowed or reversed. The shape summarizes market pricing and can offer clues about views of future interest rates and the economy—but it is not a certain forecast.
What a Treasury yield curve shows
A yield curve, also called the term structure of interest rates, relates debt yields to the time remaining until maturity. It puts yields for several maturities together at a particular time. The Federal Reserve says market participants and policymakers watch curves for clues about views of the likely policy-rate path and the broader economic outlook. Federal Reserve: Yield Curve Models and Data
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For a chart, maturity is on the horizontal axis and yield is on the vertical axis. Compare more than one point: a short maturity, an intermediate maturity and a long maturity can show whether the curve rises, flattens or changes direction. Always identify the maturities behind a description such as “inverted” or “steeper”; different sections of the same curve can have different shapes.
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“The Treasury yield curve” can refer to different published series. The U.S. Treasury’s official curve is a par yield curve. The Federal Reserve publishes a separate smoothed nominal curve using a different set of securities and fitting methods. Their values are not interchangeable, so label the source, curve type and observation date when describing a reading.
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| Feature | U.S. Treasury par curve | Federal Reserve nominal curve |
|---|---|---|
| What it represents | Par yields, with constant-maturity Treasury (CMT) values interpolated at fixed maturity points. Treasury describes CMTs as theoretical constant-maturity par yields. | A daily smoothed nominal yield curve. |
| Input securities | Indicative bid-side quotations for the most recently auctioned Treasury securities; these are quotations, not actual transaction prices. | Off-the-run coupon securities; bills and floating-rate notes are excluded. |
| Fitting method | Bootstraps instantaneous forward rates at input maturities and uses monotone convex interpolation. | Uses Svensson since 1980 and Nelson–Siegel before 1980. |
| Publication timing | Rates are usually available by 6:00 p.m. Eastern on each trading day, though delays can occur. | Publication timing is not stated on the cited nominal-curve page. |
Sources: Treasury Yield Curve Methodology and Daily Treasury Rates; Federal Reserve: Nominal Yield Curve. Treasury revised its methodology description on February 18, 2025. The table describes the products, not a claim that one is more accurate for every purpose.
What a Treasury CMT number means
A CMT yield is interpolated from Treasury’s daily par curve at a fixed maturity point; it need not equal the yield on any one Treasury security. Treasury quotes CMTs as bond-equivalent yields: simple annualized yields for securities that pay interest semiannually, not effective annual yields or APYs. Treasury: Interest Rates FAQs
How to read the slope and shape
- Upward-sloping: the longer maturity you selected has a higher yield than the shorter maturity.
- Flat or flatter: the yield difference between the selected maturities is small, or has narrowed compared with another date.
- Inverted: the shorter maturity you selected has a higher yield than the longer one.
These labels describe a comparison, not the whole curve in every case. A curve can slope upward at long maturities while being inverted over shorter ones. State the maturities and yields—or the spread between them—rather than saying simply that “the curve” is inverted.
How to tell whether the curve steepened or flattened
- Choose one series. Use the same Treasury or Federal Reserve curve for both dates.
- Choose the same maturities. For example, compare the same short and long points each time; do not switch the endpoints mid-comparison.
- Record the observation dates. Distinguish the date represented by the rates from the time they were published.
- Compare yields or calculate the spread. Subtract the shorter-maturity yield from the longer-maturity yield. A larger spread means that segment steepened; a smaller spread means it flattened. If the spread crosses below zero, that selected segment has inverted.
- Describe which yields moved. A spread can change because the short yield moved, the long yield moved, or both. The shape alone does not establish why.
Do not insert a current spread or attribute a move to a particular cause without checking the named series and dates. Treasury data can be delayed, and daily observations from different curve products may use different securities and methods.
What the curve can—and cannot—say about expectations
Because yields reflect market pricing, the curve can provide clues about perceptions of future policy rates and economic conditions. An inversion means short rates exceed longer rates for the maturities compared; it does not prove that rates will fall, that a recession will occur, or that a particular event caused the shape. Treasury notes that short rates can exceed longer rates when conditions, investor beliefs or monetary policy push short rates higher. It also says future economic and monetary policies affecting CMT rates cannot be accurately forecast, and characterizes attempts to forecast future CMT rates as risky. Treasury: Interest Rates FAQs
Researchers have studied yield-curve slope and inversion as leading indicators of recession. Treat that as a historically examined relationship, not a guarantee or a stand-alone recession call. The measure matters: identify the spread or curve series, its maturities and date rather than referring to an unspecified “yield curve.” Federal Reserve: The Yield Curve and Predicting Recessions
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Expected rates and term premiums are model estimates
Some Federal Reserve staff models decompose nominal yields into an expected-short-rate component and a term-premium component. Neither component is directly observed in the quoted yield: both depend on the model. The estimates are staff research products and may be delayed, revised or changed when methods change. When using such a decomposition, name the model and date as well as the curve; do not present a model estimate as a published market quotation. Federal Reserve: Yield Curve Models and Data
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