why is the 10 year to 2 year spread important 
many investors use the spread between the yields on 10 year and two year u s treasury bonds as a yield curve proxy and a relatively reliable leading indicator of a recession some federal reserve officials have argued that a focus on shorter term maturities is more informative about the likelihood of a recession the bottom linea yield curve that inverts for an extended period of time appears to be a more reliable recession signal than one that inverts briefly whichever yield spread you use as a proxy fortunately however recessions are a rare enough event that we haven t had enough of them to draw definitive conclusions as one federal reserve researcher has noted it s hard to predict recessions we haven t had many and we don t fully understand the causes of the ones we ve had nevertheless we persist in trying 2