Indicator · updated with every release
SOFR minus 2-year Treasury yield today
A quick read of whether markets expect money to get cheaper or dearer: the overnight rate (SOFR) minus the 2-year Treasury yield.
The full SOFR minus 2-year Treasury yield chart is in Pro, with its whole history, ranges, overlays and alerts, next to 111 other charts.
What it is
The spread takes SOFR and subtracts the 2-year Treasury yield. When the 2-year yield is below the overnight rate, the bond market expects the Fed to cut, which we label Loose. When it’s above, markets expect rates to hold or rise: Tight.
It sank deep into Tight in 2022, reaching about −2.8 points in June 2022 during that year’s stock market sell-off, and was about +1.7 points just before the Fed’s first cut in September 2024.
Why it matters for liquidity
Expectations for the cost of money feed straight into credit, the dollar and asset prices. The Pro chart shows the spread as a weekly average since 2018, with Loose and Tight zones and the 2024–26 cycle laid over 2020–23 for comparison.
Questions
Is the SOFR minus 2-year spread loose or tight now?
On 29 October 2026 it was −0.67 points: in the Tight zone, so markets expect rates to hold or rise. A year earlier it was +0.45 points.
What does a negative spread mean?
The 2-year Treasury yield is above the overnight rate, so markets expect rates to stay high or rise over the next two years.
Related
Get the full picture. Pro has the SOFR minus 2-year Treasury yield chart and 111 more on liquidity, central banks, rates and markets, plus a weekly note, momentum alerts and an MCP connector to ask about them in Claude or ChatGPT. Free for 10 days.
Start free trialGeneral information only, not financial advice. Data can be delayed, revised or wrong. Sources and credits.