At Darrell & King we watch a number of market statistics and quantitative indicators. One measurement we track is the 10 Year US Treasury Yield minus the Two Year US Treasury Yield. As you see in the accompanying graph, when that difference turns negative, it indicated a coming recession. One reason behind the 10 Year and Two Year negative spread indicating a recession comes from the idea that bond buyers demand a higher short term rate during uncertain times or times of poor growth. Since you can see that the indicator has been fairly accurate over a 40 year period, we continue to monitor developments in this spread.