Bonds Analysis by James Picerno covering: United States 10-Year, United States 30-Year, 10-2 Year Treasury Yield Spread, U.S. 20-Year. Read James Picerno's latest article on Investing.com
inverts the shift is widely viewed as a reliable forecast that a recession is near. But this time has been different, or so it seems. The curve has been inverted since July 2022, the longest inversion on record, but a recession has yet to arrive.
In a series of email exchanges with CapitalSpectator.com, Dieli outlines his views on the yield curve, of which he is a veteran analyst on behalf of his clients.the yield curve inversion was resolved,” he advises. “The signal is not when the curve inverts. The signal is when the curve goes back to its normal shape.”
I use the Fed Funds rate because the FOMC has complete control over its level and trend, which means that the duration and severity of a yield curve inversion are largely at their discretion. I use the 10-Year Note both because it has the longest continuous issuance history of the long-maturity securities That series has dipped below 1% in front of every cycle peak. Right now, it is running at about 1.6% and has been in a downtrend for the past year.
Having an inverted yield curve, flat manufacturing activity, slowing employment growth, and an inflation rate higher than the unemployment rate suggests a level of instability that would facilitate the formation of a business cycle peak. Whether we get one will depend heavily on how, when, and why the FOMC executes its policy pivot.
United States 30-Year 10-2 Year Treasury Yield Spread U.S. 20-Year
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