Treasury yield curve · 2023
The Yield Curve in 2023
In 2023, the US 10-year Treasury yield averaged 3.97% and the 2-year 4.6% — a 10y−2y spread of -0.63, and the curve was inverted in 12 of 12 months. Here's the whole curve tenor by tenor, what its shape signaled, and how it compares with the 4.38% 10-year today.
- 2023 · 10-year 3.97% 2-year 4.6%
- 10y−2y spread -0.63 12 mo inverted
- vs today 4.38% 10-year, 2026
- Deepest that year -1.06 min 10y−2y
The whole curve in 2023
A single year's curve is best read maturity by maturity, and the interactive chart above lets you hover any point on it. In broad strokes, 2023 opened at the short end with three-month bills near 5.3% and the two-year note around 4.6%, rose through the belly of the curve to the 3.97% ten-year benchmark, and reached out to roughly 4.1% on the thirty-year long bond. That is a span of about -1.20 points from the shortest bills to the longest bond — an unusually flat-to-inverted shape, the long end offering little or no extra yield over the short end.
The short end versus the long end
The two halves of the curve are driven by different forces. The short end — the 3-month bill at 5.3% and the 2-year note at 4.6% in 2023 — moves with the Federal Reserve's policy rate and with expectations for where it's headed. The long end — the 10-year at 3.97% and the 30-year at 4.1% — is set more by the market's view of long-run growth and inflation. When the Fed is hiking aggressively, the short end can climb above the long end, and the curve inverts. In 2023 the 10-year sat -1.33 relative to the 3-month bill — below it, so even the Fed's preferred 10y−3mo gauge was inverted.
What the 2023 curve signaled
The yield curve reached its deepest inversion in four decades even as the 10-year yield climbed to its highest level since before the financial crisis.
Across 2023 the 10-year Treasury averaged 3.97% and the 2-year 4.6%, leaving the 10y−2y spread at -0.63. That put the curve into inversion — short-term yields above long-term ones — for 12 of the year's months, as deep as -1.06. An inversion like this is the bond market's way of signaling it expects the Fed to be cutting rates before long, usually because it sees the economy weakening. Measured by how deep it got, 2023 ranks 1st of the 17 years on record.
The 10-year's path through 2023
The benchmark 10-year didn't sit still during the year. It climbed, moving from about 3.52% at the start of 2023 to 3.88% by year-end, and traded between roughly 3.44% and 4.88% along the way. For anyone shopping for a mortgage that year, those swings mattered: the 30-year fixed is priced off the 10-year, so its rise and fall showed up in home-loan quotes within weeks. See exactly what mortgage rates did in 2023.
How 2023 compares with today — and its own decade
The 10-year sits at about 4.38% today, so 2023's 3.97% was below the current level — the 4th-highest of the 17 years in this record. The spread has since moved to +0.28, so the curve is back to its normal upward slope. Within the 2020s, the 10-year averaged about 3.15%, and 2023 ran above its own decade. A year earlier, in 2022, the 10-year averaged 3% with a -0.08 spread. The following year, 2024, it rose to 4.24%.
The curve doesn't move on its own — it's driven by the Fed at the short end and by growth and inflation expectations at the long end. See what the Fed's policy rate did in 2023, and how mortgage rates moved in 2023 as a result.
This is one year of the story. For the whole picture — every month since 2010, the great 2022–2024 inversion, today's curve and what it all signals — see the US Treasury yield curve, 2010–today.
The yield curve in 2023 — FAQ
What was the 10-year Treasury yield in 2023?
In 2023, the US 10-year Treasury yield averaged 3.97%, ranging from about 3.44% to 4.88% over the year, and the 2-year averaged 4.6%. The 10-year was up from 3% the year before.
Was the yield curve inverted in 2023?
Yes. In 2023 the 10y−2y spread averaged -0.63 and the curve was inverted in 12 of the year's months, reaching as deep as -1.06. The 10-year also sat below the 3-month bill, the Fed's own preferred recession gauge. An inverted curve — short-term yields above long-term ones — is a classic recession warning.
How steep was the 2023 yield curve?
Measured from the 3-month bill (5.3%) to the 30-year bond (4.1%), the 2023 curve spanned -1.20 points. The 10-year sat -1.33 above the 3-month. A wider positive gap means a steeper, more "normal" curve; a negative one means inversion.
How did 2023 compare with today?
In 2023 the 10-year averaged 3.97%, versus 4.38% today — below the current level, and the 4th-highest of the 17 years on record. The 10y−2y spread was -0.63 then, against +0.28 now.
What happened to Treasury yields in 2023?
The yield curve reached its deepest inversion in four decades even as the 10-year yield climbed to its highest level since before the financial crisis.
