The 10Y-3M spread is the basis for the New York Fed's recession probability model. When this measure inverts, the NY Fed model typically shows recession probability above 30%, a level that has preceded every recession since 1968.
ALAN INTELLIGENCE
ALAN INTELLIGENCE · alanglobalintelligence.com
ALAN IntelligenceData as of 2026-08-30
Every historical instance, overlaid — S&P 500 forward path from the event
Each instance (n=9)Median path25th-75th percentileCurrent: 2025
Median forward returns by horizon
Bars: median S&P 500 forward return. Whiskers: 25th-75th percentile. n = 9 occurrences.
Based on 9 historical occurrences. Last triggered: 2025-02-26.
Past performance is not indicative of future results. This material is for informational and educational purposes only and does not constitute investment advice, an offer to buy or sell any security, or a recommendation. Data from publicly available sources believed to be reliable but not guaranteed. All investments involve risk, including possible loss of principal.
alanglobalintelligence.com
ALAN GLOBAL INTELLIGENCE · alanglobalintelligence.comSource: FRED T10Y3M · Generated 2026-08-30
Historical occurrencesshowing 9 of 9
Date
1M return
1Y return
5Y return
1982-02-01
-5.8%
+22.7%
+128.9%
1989-03-27
+5.6%
+16.1%
+62.1%
1998-09-10
+0.4%
+37.9%
+5.0%
2000-04-07
-6.9%
-25.0%
-24.6%
2006-01-17
-0.2%
+11.2%
+0.9%
2007-07-20
-5.8%
-17.9%
-10.3%
2019-03-22
+4.8%
-20.1%
+86.3%
2022-10-18
+6.4%
+15.0%
—
2025-02-26
-4.4%
+15.5%
—
What history says
Editorial commentary written by ALAN analysts. Figures cited below are analyst-authored context — they are not derived from the chart above and may reflect different windows or sources.
The NY Fed publishes a recession probability based on this spread
The NY Fed's model translates the 10Y-3M spread into a recession probability. Readings above 30% have preceded every recession. This is publicly available and updated monthly.
The model's lead time is 12 months
The NY Fed model estimates recession probability 12 months ahead. A high reading today says 'recession within 12 months is likely,' not 'recession is happening now.'
The 2022-24 inversion has been the longest ever
The 10Y-3M remained inverted for over 24 months in 2022-24, the longest inversion on record. This has tested the model's patience — either a recession is delayed, or the relationship has changed.
For your portfolio
A model built around a 12-month lead hands you 12 months of preparation: consider rebuilding cash reserves, upgrading bond credit quality, and writing down — in advance — what you will and won't do if a recession arrives. None of that requires selling equities, which have historically kept rising well after this signal first appears.
For information and research only. Not investment advice. ALAN does not place trades or execute orders. Figures come from the sources shown and can lag the market; verify independently before making decisions. Past performance is not predictive of future results.
LIVENYSE — · ETFEED MKT · — msBUILD ced8372
ALAN is not a broker-dealer or investment advisor. All data is informational only and does not constitute investment advice. Past performance does not guarantee future results.