Fed funds vs the 10-year yield: 25 years of the gap
What this video covers
The effective fed funds rate and the 10-year Treasury yield since 2001 from FRED, with the latest one-point gap. It explains what an upward-sloping versus an inverted curve has meant.
Sources and the longer explanation: Fed Funds Rate vs 10-Year Treasury Yield: 25-Year Chart and Data.
Numbers shown on screen
- 3.88%: Effective fed funds rate
- 4.86%: 10-year Treasury yield
- +0.98: Gap, percentage points
- 4.86%: 10-year yield: Nov 6, 2025 to Nov 6, 2026
How the visuals were made
In 0:50 the video moves through 6 scenes, including an animated line chart, “Daily rates since 2001, %”, drawn from FRED series DFF from 2001-01, FRED series DGS10 from 2001-01; a side-by-side comparison of Upward-sloping and Inverted. All graphics were rendered frame by frame by UXS; no stock footage, logos or faces are used.
Chapters
- 0:00
- 0:12 Daily rates since 2001, %
- 0:18 Two curve shapes
- 0:27 10-year yield: Nov 6, 2025 to Nov 6, 2026
- 0:33 Fed cuts, yet the 10-year rises?
- 0:40 Risk note
Transcript
On November 6, 2026, the effective fed funds rate was 3.88% and the 10-year Treasury yield 4.86%, a gap of about one point.
The Fed sets the overnight rate. The bond market sets the 10-year, so the two lines often drift apart.
When the 10-year yields less than the overnight rate, the curve is inverted, which has often come before US recessions, though not on a fixed timetable.
A year earlier, on November 6, 2025, the 10-year yield was 4.11%.
And the 10-year can rise even while the Fed cuts, if markets expect more inflation or more government borrowing.
On October 28, the FOMC held its range at 3.75% to 4%. Educational only, not financial advice.