While inversions in the curve have certainly preceded many previous recessions, there are technical factors to consider when talking about the current bout of inversions.
Wall Street is obsessing over the US yield curve these days. No wonder. An inverted US yield curve, in which short-term interest rates are higher than long-term ones, is widely seen as an ominous sign of looming recession risks.
On Monday, the yield on 30-year Treasuries fell below that on five-year ones for the first time since 2006. That comes after yields in other parts of the curve – namely the five- to 10-year and three- to 10-year – inverted last week.
