Near-Term Forward Spread
L2 — Indicators+0.57% derived proxy (2.25×2Y 4.21 − 1.25×1Y 4.03 − 3M 3.86, FRED as of 2026-07-20; linear-interp, not the Fed's fitted-curve NTFS) — No hard easing priced over the next 18 months
What it measures: 18-month-forward 3-month yield minus spot 3-month — the Fed's preferred near-term recession gauge. FRED carries no NTFS series, so this is a documented proxy: linear-interp forward from the 1Y/2Y legs (2.25×2Y − 1.25×1Y − 3M), not the Fed's fitted-curve estimate
Threshold: > 0.5% = easing priced gradually | 0-0.5% = flat | < 0% = cuts priced hard (recession read)
Current interpretation: +0.57% derived proxy (2.25×2Y 4.21 − 1.25×1Y 4.03 − 3M 3.86, FRED as of 2026-07-20; linear-interp, not the Fed's fitted-curve NTFS) — No hard easing priced over the next 18 months
Full methodology for this signal is forthcoming — the write-up has not yet been published. The live reading above comes directly from the signal engine.
How it works
This signal's mechanism doesn't reduce to a standard diagram — read the methodology below for how it's constructed.
The history
Historical series being assembled — this signal has no archived daily series yet. The chart renders automatically once 60 observations exist; the live reading above is current either way.
Educational content. Not investment advice; past patterns do not guarantee future results. Signals identify regime environments, not exact timing or magnitude.