Yesterday, March 28, a substantial piece of the Treasury yield curve fell into inversion.
The yield on the 5-year Treasury climbed to 2.57%. Which put it above the yield both the 10-year Treasury at 2.46% and the 30-year Treasury at 2.55%.
“Normally” investors in bonds demand higher yields for locking up their money in longer maturity bonds. When the yield curve inverts–when shorter maturity bonds yield more than longer maturities–it’s often a sign that the bond market is expecting a Recession, which would drive future bond yields below nearer term yields.
Today, bond prices have gained slightly on news that Ukraine and Russia might start talking soon and that there might even be a cease-fire agreement.
But the inversion remained intact over much of the yield curve. As of 12:30 p.m.on March 29, the yield on the 5-year Treasury was 2.51%. That’s even with the 2.51% yield on the 30-year Treasury but above the 2.41% yield on the 10-year benchmark Treasury. The 2-year Treasury was priced to yield 2.39%.
