2023-06-21 06:40:03
Early Tuesday (20th) Eastern Time, the United States 10-Year Treasury Bond YieldThe difference between the yield and the 2-year Treasury yield reached 97 basis points, and the yield curve inverted the most in more than 40 years.
Tuesday morning, U.S. 10-Year Treasury Bond YieldIt fell 5 basis points to 3.72%. Meanwhile, the 2-year yield fell 2 basis points to 4.69%.
Since the 1980s, an inverted yield curve has often been a harbinger of recession. Looking at the chart, this inversion is very similar to the one in 1979.
Yield inversion widens
Historically, prolonged inversions have ended in recessions. Most notably, the inversion of the yield curve that occurred in 2006-2007 was a prelude to the Great Financial Recession of 2008-2009. Also, investors saw the yield curve invert in 2000, before the market crash of 2001-2003.
With the yield curve inverted, ETFs and large bond funds focused on U.S. Treasuries are in the spotlight because they trade in opposite ways. U.S. Treasury bond ETFs rose as yields fell.
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