Main yield curve inverts as 2-year yield tops 10-year rate, triggering recession warning

CNBC:

  • The yield on the benchmark 10-year Treasury note was at 1.623%, below the 2-year yield at 1.634%.
  • The last inversion of this part of the yield curve was in December 2005, two years before a recession brought on by the financial crisis hit.
  • A recession occurs, on average, 22 months following such an inversion, according to Credit Suisse.

The yield on the benchmark 10-year Treasury note broke below the 2-year rate early Wednesday, an odd bond market phenomenon that has been a reliable, albeit early, indicator for economic recessions.

The yield on U.S. 30-year bond also turned heads on Wall Street during Wednesday’s session as it fell to an all-time low, dropping past its prior record notched in summer 2016. The two historic moves coming in tandem show that investors are increasingly worried, and indeed preparing for, a slowdown in both the U.S. and global economies.

Read more at CNBC



Advertisements