Inverted Yield Curves Revisited
I wrote about yield curve inversions back in November 2018. At the time the US yield curve was flattening, but resisting inversion. By the most common measure of inversion, the yield on the 10-year Treasury minus the yield on the 2-year Treasury (10-2). The graph below shows the 10-2 spread prior to the last recession through June 2019, and as can be seen, the spread is quite narrow but has resisted inversion. But readers who follow such things will note that by some measures, the yield curve has already inverted. In fact several maturities have inverted: 10-year minus 6-month, 5-year minus 2-year and some lesser followed short duration bonds have...Read More
