Will the 10-year minus 2-year Treasury spread be above 1.00% between Issuance and December 31, 2026?
Prediction markets currently give a 51% probability that Will the 10-year minus 2-year Treasury spread be above 1.00% between Issuance and December 31, 2026?. This contract trades at 51¢ on Kalshi, closing December 31, 2026. The market is pricing in only a 10% probability that the 10-2 Treasury spread will exceed 1.00% at any point over the next 259 days, despite the spread currently hovering near historical lows and having traded above 1.00% as recently as mid-2024.
Analysis
The market is pricing in only a 10% probability that the 10-2 Treasury spread will exceed 1.00% at any point over the next 259 days, despite the spread currently hovering near historical lows and having traded above 1.00% as recently as mid-2024. The extreme 1268.7% implied yield on the Yes side combined with zero 24-hour volume and a wide 52-cent spread suggests very thin liquidity and potential mispricing, particularly given that a steepening of just 50-75 basis points from current levels would resolve this contract affirmatively. The high cliff risk index of 9 indicates significant tail risk, likely reflecting uncertainty around Fed policy shifts that could rapidly steepen the curve before year-end 2026.
Resolution rules
If the FRED T10Y2Y series (10-Year Treasury Constant Maturity Minus 2-Year Treasury Constant Maturity), measured in percent (not seasonally adjusted), on any daily observation dated between Issuance and Dec 31, 2026 (inclusive), is above 1.00%, then the market resolves to Yes.
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Trade
sf trade KX10Y2Y-26DEC31-T1.00 yes 100