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The benchmark curve is reversing as the 30-year hits reach record lows



A significant portion of the US yield curve reversed on Wednesday morning, exacerbating fears of an impending recession.

US. Market Overview: Treasury's Chart

At around 03:20 CET, the 10-year Reference Bond rate, which is inversely related to the price, was down 1.4593%, while the 30-year Treasury yield was lower at a record low at 1.9072%. [2] The yield on the benchmark 2-year Treasury note, which is more sensitive to changes in the Federal Reserve policy, fell to 1

.5180% Wednesday morning, 6 bp higher than the 10-year rate.

The move is less than 24 hours after the spread between 10-year and 2-year interest rates dropped to negative 5 basis points, the lowest level since 2007.

A 10-year rate below the 2-year rate is viewed by bond traders as a key predictor of a recession, which is an unusual phenomenon as bondholders receive better compensation in the short term. [3] The 3-month Treasury rate has also traded higher than Wednesday's 30-year bond yield.

The US Treasury is expected to auction $ 41 billion in 5-year bonds and $ 18 billion in 1-year and 11-month floating rate notes (FRNs).

On Wednesday no important economic data reports are planned.


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