Yield Curve Inversion

There has been quite the conversation regarding the inversion of the Yield Curve between the short term US Treasury Bills versus the 10 year US Treasury Note. In essence, it appears to strongly suggest that a recession is eminent.

However this morning, Axios had a blurb regarding the 2 year US Treasury note yield versus the 10 year US Treasury Note. This spread has not [at least yet] inverted.

The Axios article suggests the Fed’s actions are more likely the cause of the rise in shorter term rates even though they have indicated they will not push up the fed funds rate this year. The level of uncertainty related to Fed policy and the level of government borrowing necessary to fund the deficit may be the key culprits in the inversion.

You can find the full article here https://www.axios.com/newsletters/axios-markets-3f94efc3-d5e2-433c-8d43-b0d6267d0a78.html?chunk=4#story4

Clearly the ‘market’ is concerned about the economy going forward. Whether that is the result of Fed Policy, US Government Deficits, Trade Policy, or whatever, Mr. Market is nervous.