IT’S OFFICIAL … THE US YIELD CURVE HAS INVERTED
The US 3mo/10yr yield curve has inverted, according to and courtesy of the nearby Bloomberg chart. The curve went negative on Friday, March 22, 2019, following the US Fed’s announcement earlier that week that there would be no more Fed rate hikes in 2019, thanks to tumbling global growth. The spread between interest rates on 3-month bills and 10-year Treasuries fell below zero as stocks fell sharply on Friday, as investors flocked to bonds, as high bond demand sent bond prices up and 10-year interest rates down. An inverted yield curve is highly predictive of next recessions, as it has been for the past 7 recessions. Take heed. We are approaching the end of the cycle.