Earlier quoted context omitted.
I can't find a reference and until recently would have assumed it was unencrypted SMTP like the olden days. What gives you that belief, and if it's TLS-secured, would you assume it has the same forward-security as (eg) Chrome-to-Gmail? Or might it be something else, because it happens out of sight, that is a little behind-the-times?
We've† already verified this downthread; I'm wrong about Yahoo (they do TLS for their retail SMTP servers but not for MX's), but Google does indeed do TLS on their servers. † Where by "we" I mean "the guy who isn't me that found the app that gives you the SSL connection details for arbitrary SMTP addresses"
That Google will "do TLS" is ambiguous. Are we sure Yahoo attempts TLS on their SMTP-connect to Google's MX? It seems unlikely if they don't support it on their own receives, and also unlikely that Gmail would reject all non-TLS SMTP.
If so, NSA wouldn't need Google or Yahoo's private key to record the plaintext of all email between them. And if the GoogleYahoo interchange is representative, plenty of other email to or from Gmail will be similarly transparent.