Mar 25, 2024 - Economy
What the perennially inverted yield curve means
Add Axios as your preferred source to
see more of our stories on Google.
The U.S. yield curve has now been inverted — meaning that 10-year Treasuries yield less than their two-year counterparts — for a record 628 days.
Why it matters: As a recession predictor, the amount of time spent inverted is irrelevant. Think of this milestone more as a broader indicator of how long things have been out of whack in the Treasury market.
Between the lines: Davide Barbuscia of Reuters explains that an inverted curve is important regardless of its predictive power.
- "An inverted yield curve is also by itself typically bad for economic activity and financial markets because higher short-term yields lift borrowing costs on consumer and commercial loans, while lower compensation for long-term lending discourages risk-taking."
