The David Lin Report · Tuesday, September 29, 2026
The discussion clarifies the difference between the 2-year/10-year yield curve (traders' curve) and the 3-month/10-year yield curve (economists' curve). While the former has been flattening, indicating recessionary fears, the latter has been steepening due to the Fed's recent actions and the three-month yield's proximity to the Fed funds rate.
“But the yield curve that economists really look at is the 10-year, three-month curve. That curve has been steepening and is at 100 basis points in the widest it's been in several months.”
“The three-month can only go so far away from the Fed's funds rate. So the Fed is only raised rates one time. They may be they're going to raise rates on October 28th.”
“Because all of the academic research about the yield curve being a predictor of the economy was done on that yield curve. On the three-month to the 10-year, the three-month to the five-year, some of the other work was done on as well. So that's why it matters.”