The News Radar

Timely links to external news and articles, usually valuation related, with occasional commentary.


Originally posted Thursday, 11 August 2022
Treasury Yield Curve Inversion Has Scope to Deepen

The two-year Treasury yield was 48 basis points above the 10-year rate on Wednesday, after coming within a whisker overnight of touching the 50-basis-point milestone last seen in August 2000. That’s based on expectations the Fed’s rate will peak at around 3.5%, from a current range of 2.25%-2.5%, according to the strategist.

If the expected peak rises a half point to 4% with no change in the market’s assessment of the neutral rate of monetary policy, the curve inversion has scope to widen to 85 basis points, Swiber wrote.

Despite the current rally, these indicators still point in the direction of upcoming weakness. Seems like we still have a long ways to go before we're out of the woods.