# 3-Month/10-Year Spread (3m10y)

Source: https://www.yieldcurve.pro/learn/3m10y-spread

The **3-month/10-year spread** (3m10y) is the yield difference between the 10-year Treasury note and the 3-month Treasury bill. The Federal Reserve Bank of New York uses this specific spread as its primary recession probability indicator.

The 3m10y spread differs from the [2s10s](https://www.yieldcurve.pro/learn/2s10s-spread) in important ways:

- **The 3-month bill** is tightly anchored to the current Fed funds rate, making it a cleaner proxy for current monetary policy stance
- **The 2-year note** embeds 24 months of rate expectations, adding a forward-looking component that the 3-month bill lacks
- The 3m10y therefore captures the gap between *current* policy and *long-term* equilibrium, while the 2s10s captures the gap between *near-term* and *long-term* expectations

The New York Fed's recession model, based on research by Estrella and Mishkin, uses the 3m10y spread to generate a probability of recession 12 months ahead. When this spread inverts (turns negative), the model's recession probability rises sharply.

Historical behavior:

- **Normal range**: +100 to +350 bps
- **Pre-recession inversion**: typically inverts 6-18 months before a recession
- **2023 extreme**: reached approximately **-189 bps** in May 2023, the [deepest inversion](https://www.yieldcurve.pro/curves/deepest-inversion) in decades

The 3m10y is available as a spread page at [/spreads/3m10y](https://www.yieldcurve.pro/spreads/3m10y) and in the [slopes](https://www.yieldcurve.pro/slopes) charting tool. Regime classification for this pair is available at [/regimes/30-year/2-year](https://www.yieldcurve.pro/regimes/30-year/2-year).