The 30/10 Spread Reaches an All-Time High

Here’s a look at the spread between the yield on the 30-year T-bond and the 10-year T-bond.

Over the last 20 years, the spread has usually been between 20 and 70 basis points (note that the regular 30-year T-bond was retired for a bit in the early 2000s).

Recently, however, the spread has surged to 140 basis points. The previous high was 111 points in October 1992. That coincided with the low point of the recession.

I think a good way to view this chart is as an inversion of investor optimism on equities.

Posted by on October 18th, 2010 at 12:25 pm


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