
3-month and 10-year US Treasury inverted today - dragontamer
https://www.bloomberg.com/news/articles/2019-03-22/key-part-of-u-s-curve-is-closest-to-inversion-since-07-chart
======
dragontamer
Under normal economic conditions, loaning money for longer-periods of time
should result in higher interest payments than loaning money for a short
period of time.

For one major benchmark, this is no longer true. The 3-month US Treasury and
10-year US Treasury is now inverted, where the 3-month Treasury yields a
higher interest rate than the 10-year.

This is one of the more reliable indicators of an upcoming recession. There's
a lot of studies for why the yield curve is a leading-indicator of recessions,
but it gets pretty complicated to explain. (IE: I actually don't know the
reason, but there's plenty of citations available online :-) )

This seems to have been a sudden shift downward of the US 10-year Treasury.
Yesterday's 10-year was trading at 2.54%, but apparently dropped 10-bps today
(not yet reported on Treasury.gov yet, only being reported by Bloomberg right
now)

[https://www.treasury.gov/resource-center/data-chart-
center/i...](https://www.treasury.gov/resource-center/data-chart-
center/interest-rates/Pages/TextView.aspx?data=yield)

~~~
alecco
Yes, a lot of people in finance say it's been over 10 years so a recession
should happen soon. But nobody says what are going to be the triggers. Last
time it was sub-prime loans and mispriced derivatives. But this time? Trade
war? Government deficits? China's credit crisis? Low yields pushing savers to
riskier investments? Nobody seems to know.

------
celias
Behind The Curve from Planet Money talks with Duke Professor Campbell Harvey
about whether or not to worry about yield curve inversion in today's economy -
[https://www.npr.org/sections/money/2018/12/04/673429096/behi...](https://www.npr.org/sections/money/2018/12/04/673429096/behind-
the-curve)

~~~
alecco
Correct me if I'm wrong, but he says not to worry _yet_. And adds to look at
other indicators like volatility and not just 1 indicator.

See [https://www.bloomberg.com/news/articles/2019-03-23/-fatal-
tr...](https://www.bloomberg.com/news/articles/2019-03-23/-fatal-trifecta-is-
what-jpmorgan-s-normand-eyes-for-market-risk)

