3-Month to 30-YearThe 3-month to 30-year inverted on October 18, 2022 and has been inverted ever since.Treasury Yield Spreads May 01 2022 to January 5 2023The 2-year to 10-year inversion is one of the most widely followed recession indicators. It has been inverted continually since July 6, 2022.The 3-month to 10-year inversion is even more extreme. It has been continually inverted since October 18, 2022. Terrible Economic DataThe December jobs report was anemic and the ISM services PMI was an outright disaster.Scroll to ContinueAlthough housing in the gutter and the rest of the economy sinking fast, the Fed is committed to a course of action to maintain credibility. To steepen in the traditional sense first requires the curve to flatten. With the Fed holding rates higher for longer, that won’t easily happen unless the Fed panics due to a credit event. Given that the Fed has repeatedly vowed to keep rates higher for longer regardless of economic slowing, do not expect the curve to steepen other than by deeper inversions until recession hits. For more discussion on this idea please see Hello Curve Watchers, the Yield Curve is Steepening, Just Not in the Normal Sense Here is a key idea regarding the stock market:This post originated on MishTalk.Com.Thanks for Tuning In!Please Subscribe to MishTalk Email Alerts.Subscribers get an email alert of each post as they happen. Read the ones you like and you can unsubscribe at any time.If you have subscribed and do not get email alerts, please check your spam folder.Mish
