Market Commentary

In Focus – Yield Curve

The 2 to 10-year yield curve inversion: What’s happening? The yield on the benchmark 10-year Treasury note broke below the 2-year rate, a “canary in the coal mine” scenario that has historically preceded every recessionary environment since 1978. The 10-year Treasury note yield fell as low as 1.574%, briefly trading around 1 basis point below the yield on the 2-year note. Ultimately, the inversion was short-lived with the 10-year treasury yield closing higher than the 2-year.   This phenomenon occurs when two trends emerge: The bond markets believe interest rates will fall in the future as the Fed or economic forces attempt to create...