Yield Curve and Predicted GDP Growth
- Background: The yield curve—which measures the spread between the yields on short- and long-term maturity bonds—is often used to predict recessions.
- Description: We use past values of the slope of the yield curve and GDP growth to provide predictions of future GDP growth and the probability that the economy will fall into a recession over the next year.
| May | April | March | |
|---|---|---|---|
| 3-month Treasury bill rate (percent) | .12 | .12 | .11 |
| 10-year Treasury bond rate (percent) | .69 | .61 | .99 |
| Yield curve slope (basis points) | 57 | 49 | 88 |
| Prediction for GDP growth (percent) | 1.9 | 1.9 | 2.2 |
| Probability of recession in 1 year (percent) | 19.4 | 20.0 | 20.6 |
- Yield-Curve-Predicted GDP Growth
- Probability of Recession Calculated from the Yield Curve
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