IEF - Here Is The Pattern Of Yield Curve Inversions Prior To Recessions And Stock Market Peaks

Most investors may be surprised to know that historically the 10-Yr/2-Yr and 10-Yr/3-Mo yield curve spreads tend to invert in tandem. Specifically, until this business cycle, the 10-Yr/2-Yr spread has consistently inverted prior to the 10-yr/3-Mo. This relationship goes back to the 1970s when 2-year Treasuries were first auctioned regularly.

Currently, the fact that the 10-Yr/2-Yr yield curve has not inverted prior to the 10-Yr/3-Mo is a bit of a puzzle. There are any number of articles providing some thoughtful analysis of the current 10-Yr/3/Mo inversion. Several authors/experts suggest that there are factors other than