2-Year Treasury Yield: 3.57% -- The 2-year yield reflects where traders think the Fed is going next
The 2-year treasury yield is 3.57% as of Mar 2026. The 2-year yield reflects where traders think the Fed is going next. It has been the most accurate Fed forecaster available.
2-Year Treasury Yield - Historical Chart
Gray shaded areas indicate U.S. recessions.
Source: Federal Reserve FRED, Series DGS2. Shaded areas = NBER recession dates. Updated 2026-03-09.
What 3.57% 2-Year Treasury Yield Tells Us
The 2-year Treasury yield at 3.57% is the market's best guess at where the Fed funds rate will average over the next two years. It moves before the Fed does, pricing in expected rate decisions weeks or months in advance.
When the 2-year drops sharply, it means traders expect aggressive Fed cuts -- usually because they see a recession coming. When it rises, traders expect the Fed to hold steady or hike. Right now at 3.57%, the 2-year is below the current fed funds rate of approximately 3.64%, which means the market expects the Fed to cut rates over the next two years.
For business owners, the 2-year yield is a free forecast. It tells you where your floating-rate loan payments are headed. If the 2-year is below the current fed funds rate, expect your payments to decrease within 12-24 months. If above, expect them to stay flat or increase.
The Best Forecaster You Are Not Using
Academic research consistently shows that the 2-year Treasury yield outperforms Fed dot plots, economist surveys, and futures markets in predicting the path of short-term rates. It is publicly available, updated daily, and free. There is no better tool for forecasting your borrowing costs.
What This Means for Business Owners
The gap between the 2-year (3.57%) and the 10-year (4.13%) is the yield curve spread -- currently positive at 0.56%. This matters because the curve was deeply inverted (2-year above 10-year) for most of 2022-2024, which historically signals recession.
The un-inversion itself is not the all-clear. In fact, the yield curve un-inverted before every recession since 1970. The recession hit 6-18 months after un-inversion as the factors that caused the inversion (tight monetary policy, slowing growth) worked through the economy.
What the 2-Year Is Telling You Now
At 3.57%, the 2-year says rate cuts are coming but will be moderate. The gap between 3.57% and the current fed funds rate suggests roughly 0.5-1.0 percentage points of cuts over two years. That would bring prime from 6.75% to roughly 5.75-6.25% -- helpful but not transformative for businesses carrying expensive debt.
Frequently Asked Questions
The 2-year treasury yield is 3.57% as of Mar 2026, based on Federal Reserve FRED series DGS2.
The reading moved up by 0.03pp from Mar 2026. The reading has been mixed recently, fluctuating without a clear directional trend over the past 6 months.
The all-time peak was 16.95% in Sep 1981.
At 3.57%, the current reading is above the 10-year average of 2.34%.
The 2-year treasury yield influences the overall cost of capital and credit availability. Higher readings typically correspond to tighter credit conditions and more expensive borrowing for all businesses.
Federal Reserve FRED series DGS2. Updated regularly by the Federal Reserve Bank of St. Louis.