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Non-Tech : Kirk's Market Thoughts
COHR 139.28-0.5%Nov 14 9:30 AM EST

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To: Investor2 who wrote (14732)11/17/2022 12:03:52 PM
From: Kirk ©2 Recommendations

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Yield curve inverts to its deepest level since 1982

Nov. 17, 2022 9:48 AM
Jason Capul, SA News Editor

The yield curve inversion between the 2-year and 10-year Treasury notes has deepened to its widest level in four decades. The spread between the 2-year and 10-year extended to a mark of -66 basis points early Thursday, marking the deepest inversion since 1982.

My chart from ustreasuryyieldcurve.com is better than the articles:



In early market action, the 10Y (US10Y) was up 9 basis points to 3.78% while the 2Y (US2Y) gained 9 basis points as well, which pushed the yield to 4.45%.

Historically speaking, long periods of inversion have predicated future economic downturns.

Commenting on the current situation, Deutsche Bank's Jim Reid stated: “The 2s10s yield curve closing beneath -60bps for the first time since 1982, which is concerning when you consider its historic accuracy as a leading indicator of recessions.”

“Other yield curves also inverted by even more, with the 3m10yr curve down -6.6bps to -54.2bps. And even the Fed’s preferred yield curve (18m forward 3m yield minus the spot 3m yield) has now spent a full week in inversion territory, closing yesterday at -15.3bps, which is the lowest since March 2020."

seekingalpha.com
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