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The US 2-year/10-year spread
The US 2-year/10-year spread
The 2-year/10-year spread, which measures the difference between short- and long-term bond yields, fell to 30 basis points as of Tuesday (3rd July 2018). That's the narrowest spread since...
...October 2007, a few months before the Great Recession. A flattening yield curve happens when the difference between short- and long-term bond yields narrows.
An inverted curve could signal a recession
The yield curve is considered inverted when short-term yields are trading higher than long-term yields, meaning investors expect returns to depreciate in the long run. REMINDER: Historically, that phenomenon doesn't play out well. An inverted yield curve has preceded every recession in the past 60 years!
