Definition
The two most-watched points on the yield curve. The 2-year moves closely with what markets expect from the Fed; the 10-year reflects the longer outlook and helps steer mortgage rates.
The story
After a hot inflation report, the 2-year often jumps first, because markets start betting on Fed hikes. The 10-year is more about long-run growth and inflation. Watching both tells you whether a move is about the Fed or about the long run.
Why markets watch it
The gap between them is a quick read on the economic outlook.
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We explain why it moves markets. What you do with it is your call. Commentary and education only. Not financial advice. All terms