2s10s Ratio Already Near 1980s Low

Since rates are so low, maybe a ratio of 2s10s makes sense. Presently, the chart would be at 0.88 based on where the 2-year and 10-year treasury yields are at this moment. This chart is updated through yesterday's close. The absolute low for the ratio (from available data) was 0.84 in the early 1980s. A couple more days like today will get there. The normal spread has much further to go before it hits the 1980s low of negative 2.41. To put that in perspective, the 10-year would have to plummet to 0.71 percent while the 2-year remains at today's 3.12 percent. If the 2-year drops, the only way to match that early 1980s spread is with a negative yield on the 10-year treasury.

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