Yield Curve
The 10yr-2yr is the generally preferred yield curve to monitor as a leading economic indicator. In the chart below, you can see yield curve inversion (as of the time of writing on January 8th, 2023) represented by the 10yr-2yr interest rate ratio below the red line. An inverted yield curve is a warning of likely severe economic weakness. A reversal to flattening and then steepening (above zero) would indicate a recession has officially begun.
For clarity, here are separate charts for the 10-yr and 2-yr treasury yields demonstrating that the inversion as of January 8th, 2023 results from the 2-yr yield being higher than the 10-yr yield. Flattening will occur as the rates near equal. Steepening will occur when the 10-yr rate begins to exceed the 2-yr. Historically, this is a strong indication of immediate economic weakness, particularly if the steepening is rapid. The reversal to steepening occurs when the Fed reacts to GDP weakness by aggressively cutting shorter term rates. The 2-yr treasury yield will decline relative to the 10-year yield (although the 10-year+ yield is likely not increasing if a flight to safety in all treasuries occurs, driving down yields). Once flattening and then steepening occurs, economic weakness is apparent.