Parts of the US bond yield curve have inverted more deeply after the Federal Reserve signaled further interest-rate hikes, suggesting that investors are fretting about a recession.
The widely-tracked economic indicator is a graphical representation of the spread between long- and short-term US Treasury yields.
When short-term debt securities offer higher yields than long-dated ones, the yield curve is said to be “inverted” – and that movement has foreshadowed every major US recession since 1969, according to the London School of Economics.
The curve has been indicating since July 2022 that an economic slump is looming, and negative spreads deepened on Jerome Powell’s admission that more central bank tightening looks likely.
