The yield curve un-inverts, and the history is less useful than it looks
The two-year fell below the ten-year for the first time in nearly two years. Every recession was preceded by this. So were several non-recessions.
The spread between two-year and ten-year Treasury yields turned positive this week, ending the longest inversion on record. The financial press reached, predictably, for the recession signal.
The signal is real but it is routinely misread. An inversion has preceded every US recession since the 1960s. What is less often said is that the un-inversion, not the inversion, is what tends to arrive close to the downturn, and that the lag between the two has ranged from two months to almost two years.
Keep reading. It is free.
You have read the first third of this story. Create a free Bridge 2 Profit account to unlock the full article, plus our daily market wrap.
- Full access to every story
- Daily and weekly market wrap by email
- Breaking-news alerts for the markets you follow
Already registered? Log in
No card required. We never sell your data. See our Privacy Policy.
THE DAILY MARKET WRAP, IN YOUR INBOX BY 8 AM IST
One email, every trading morning. The moves that mattered, why they mattered, and what to watch next.