US Yield Curve Disinverts as Soft Labor Data Fuels Fed Cut Bets

Two-year Treasury yields briefly dipped below those on 10-year

https://www.bloomberg.com/news/articles/2024-09-04/us-yield-curve-disinverts-as-soft-labo r-data-fuels-fed-cut-bets

>US Yield Curve Disinverts as Soft Labor Data Fuels Fed Cut
>Bets
>
>Two-year Treasury yields briefly dipped below those on
>10-year


We're not out of the woods yet, as recessions start when curves are re-steepening and not when close to their maximum inversion point. Indeed the last 4 recessions only began once the curve was positive again.

>>US Yield Curve Disinverts as Soft Labor Data Fuels Fed
>Cut
>>Bets
>>
>>Two-year Treasury yields briefly dipped below those on
>>10-year
>
>We're not out of the woods yet, as recessions start when
>curves are re-steepening and not when close to their maximum
>inversion point. Indeed the last 4 recessions only began once
>the curve was positive again.


Of course, a perfect soft landing would also bring a steeper curve, as the Fed will be able to cut and lower yields at the front-end. So whichever way you lean, a positive sloping curve (if we continue to move in that direction) likely brings forward the moment of truth as to whether the yield curve has completely failed as a leading indicator in this cycle, or whether its powers were just felt later than in other cycles through history.