VGSH - When Will The Yield Curve 'Un'Invert?
2024-07-10 12:20:00 ET
Summary
- The UST yield curve has been inverted, but there is speculation about when it will “un”invert and move out of negative territory.
- Short-term and long-term rates do not always move in the same direction, and the magnitude of their movement affects yield curve developments.
- The potential for Fed rate cuts could impact the timing of the yield curve moving out of negative territory, with the UST 2-Year/10-Year spread potentially being the first to do so.
By Kevin Flanagan
In my last blog post, I discussed how the inverted Treasury ( UST ) yield curve may have lost some of its predictive luster with respect to foreshadowing a recession , at least up to this point anyway. However, there’s another topic that I’ve been discussing in client meetings that is slowly becoming a “hot” topic, and that is the timing for when the UST curve could “un”invert, i.e., move out of negative territory....
When Will The Yield Curve 'Un'Invert?