• The yields on the 5-year and 30-year US treasuries inverted on March 28th for the first time since 2006,
raising fears of an upcoming recession.
• The yield on the 5-year note reached 2.56%, while the yield on the 30-year at one point fell as low as
2.55% (5-year yields rose higher throughout the session but did not coincide with an inversion with the
• When investors demand more in return for shorter-term debt relative to longer-term debt, it can often
signal a decrease in confidence about the near-term financial outlook, making the yield-curve inversion
a popular recession signal. The last time that such a yield curve inversion occurred was in 2006, a
couple of years before the Global Financial Crisis.
• Despite the inversion, the relationship that is often most looked upon by traders— the spread between
the 2-year and 10-year treasury rates— remained positive while the S&P 500 posted gains on the day.
However, as the Federal Reserve prepares to conduct several rate hikes in 2022, the risk of additional
inversions will increase.


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