Chart No. 209
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8 min read
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The curve un-inverted. Nobody threw a party.
The yield curve spent two years upside down and the recession never came. Now it is the right way up, and that is the part that usually hurts.
Tomás Ferreira
Contributor
Illustrative data based on public sources.
UST 2Y · UST 10Y
The gap between 10-year and 2-year Treasury yields turned positive again in the spring and now stands at +18 basis points. The curve spent more than two years inverted, the longest stretch since 1980.
Recessions have rarely started while the curve was inverted. They have tended to start after it turned positive again, as the Federal Reserve cut rates in response to weakness. That is the pattern this issue tests against the data.
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Not investment advice. Carry writes about markets; it does not tell you what to buy or sell. Charts use illustrative data unless a source says otherwise.
