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1 Article
Source: Common Domain

Afraid of the Yield Curve You’re Looking at the Wrong One

Saturday 09:00 GMT

Stocks have sold off hard, as investors fear such so-called inversions of the yield curve presage recessions (every recession since the 1950s was foreshadowed by an inverted curve).

Until now no one paid attention to the five minus two, with markets watching the 10-year minus 2-year yield and academics tending to follow the 10-year minus the 3-month Treasury bill yield. A model developed by the New York Fed based on the 10-year minus 3-month yield puts the recession probability over the next year at roughly 15%, higher than in the past few years but still low.

1 Article
Source: Common Domain

10-year Treasury yield hovers above 3-month low ahead of jobs report

Saturday 11:46 GMT

The 10-year Treasury note yield TMUBMUSD10Y, +0.02% rose 1.2 basis points to 2.888%, bouncing off a more than three-month low.

The gap between the 2-year note yield and the 10-year note yield, a common gauge of the yield curve’s slope, narrowed to 12 basis points, or 0.12 percentage point. When the short-dated maturity pushes above its long-term peer, this rare bond market phenomenon is seen as a recession indicator.


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