How long after an inversion does a recession start?

Between 1 and 17 months after the first inverted month from 1969 to 2020, and 40 months after the 1966 inversion.

What is the Sahm rule?

A recession signal that fires when the three-month average unemployment rate rises 0.5 points above its low of the past year. It fired in July 2024 without a recession, its first false alarm since 1976.

MacroPublished Nov 2026 · FRED data to Oct 2026

Every yield-curve inversion since 1969 was followed by a recession. Except this one

The 10-year minus 3-month Treasury spread went below zero 9 times from 1969 to 2020, and a recession began within 17 months each time. The 2022–24 inversion was the longest; 47 months after it began, no recession.

Inversions since 1969 followed by recession: 9 of 9
Longest inversion: 25 months
Months since it began: 47
Recessions since: 0
Sahm rule false alarm: Jul 2024

What we found

From 1969 to 2020 the 10-year minus 3-month Treasury spread went below zero 9 times, and an NBER recession began within 17 months each time.

The 2022–24 inversion was the longest (25 months) and the deepest since 1980. 47 months after it began, there has been no recession. The Sahm rule also fired in July 2024 without one, its first false alarm since 1976.

The 10-year minus 3-month Treasury spread since 1968, with inversions in red and recessions shaded: each inversion before 2022 is followed by a shaded recession, the 2022–24 one is not.

The full results

Months from the first inverted month to the next recession

2022: no recession so far.

Every inversion of the 10-year minus 3-month spread

Inverted	Months below zero	Deepest (pts)	Next recession began	Months later
Sep 1966 – Jan 1967	5	−0.34	Jan 1970	40
Jan 1969	1	−0.10	Jan 1970	12
Jul 1969 – Jan 1970	5	−0.29	Jan 1970	6
Jun 1973 – Sep 1974	15	−1.27	Dec 1973	6
Dec 1978 – Apr 1980	17	−2.45	Feb 1980	14
Nov 1980 – Aug 1981	10	−2.65	Aug 1981	9
Aug 2000 – Dec 2000	5	−0.53	Apr 2001	8
Aug 2006 – Apr 2007	9	−0.38	Jan 2008	17
Jun 2019 – Sep 2019	4	−0.32	Mar 2020	9
Feb 2020	1	−0.02	Mar 2020	1
Nov 2022 – Nov 2024	25	−1.57	None so far	—

Monthly averages, so brief dips inside a month may not show. Months later: from the first inverted month.

Sahm rule signals

Fired	Next recession began	Months later
Dec 1959	May 1960	5
Aug 1960	May 1960	Already 3 months in
Oct 1969	Jan 1970	3
Feb 1970	Jan 1970	Already 1 months in
Mar 1974	Dec 1973	Already 3 months in
Jul 1974	Dec 1973	Already 7 months in
Nov 1976	Feb 1980	39
Apr 1980	Feb 1980	Already 2 months in
Nov 1981	Aug 1981	Already 3 months in
Nov 1990	Aug 1990	Already 3 months in
Jun 2001	Apr 2001	Already 2 months in
Apr 2008	Jan 2008	Already 3 months in
Apr 2020	Mar 2020	Already 1 months in
Jul 2024	None so far	—

Latest (Oct 2026): Sahm reading 0.00, unemployment 4.1%, 10-year minus 3-month spread +1.08 points.

Why an inversion signalled recessions

Normally long-term rates are above short-term ones, to pay lenders for tying up their money. When short rates rise above long rates, the market expects the central bank to cut, usually because it expects the economy to weaken. Banks, which borrow short and lend long, also lend less.

Why this time may be different

Possible reasons include the large savings households and companies held after 2020, borrowing locked in at low fixed rates before the hikes, and a term premium on long bonds that had been unusually low. None is settled, and an inversion has never been a timing tool: the lag before past recessions ran from 1 month (2020, when COVID struck) to 17, and 40 after the 1966 inversion.

Nine for nine is a small sample. A rule that has worked nine times can still fail, and one false alarm doesn’t mean it never works.

How it was measured

Monthly GS10 minus TB3MS from FRED; NBER recession months (USREC).

Caveats

NBER dates recessions after the fact, so a recession that has already begun could still be declared.
An earlier inversion, in 1966, was followed by a recession only after 40 months.

Questions

Does an inverted yield curve predict a recession?: From 1969 to 2020 the 10-year minus 3-month spread inverted 9 times, and a recession began within 17 months each time. The 2022–24 inversion, the longest, has not been followed by one after 47 months.
How long after an inversion does a recession start?: Between 1 and 17 months after the first inverted month from 1969 to 2020, and 40 months after the 1966 inversion.
What is the Sahm rule?: A recession signal that fires when the three-month average unemployment rate rises 0.5 points above its low of the past year. It fired in July 2024 without a recession, its first false alarm since 1976.

More research

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For information only. Not investment advice. Published Nov 2026. Data: FRED data to Oct 2026.