A Recession in 2022 Looks Increasingly Likely As More Yield Curve Inversions Appear
Yield Curve data from the New York Fed as of 2022-03-29, yellow highlights mark Inversions, […]
Yield Curve data from the New York Fed as of 2022-03-29, yellow highlights mark Inversions, chart by Mish
The highly watched 2-10 spread was positive 6 basis point (2.41 minus 2.35) as of the close on March 29 having briefly inverted (negative) intraday.
Yield Curve Spreads Since January 2021
Yield Curve Spreads Since January 2022
Six Inversions
- 20-Year to 30-Year: 15 Basis Points
- 7-Year to 10-Year: 9 Basis Points
- 5-Year to 10-Year: 8 Basis Points
- 5-Year to 3-Year: 5 Basis Points
- 3-Year to 10-Year: 13 Basis Points
- 3-Year to 30-Year: 1 Basis Point
Inversions (shorter-duration bonds yielding more than longer-duration bonds) are a sign of a weakening economy and a recession.
The most widely watched recession harbinger is the 2-10 spread which briefly inverted intraday on March 29 but finishing the day at a positive 6 basis points.
The answer to the question “when?” depends on how fast the the Fed hikes and how resilient the housing and stock market bubbles are to Fed hikes.
2022 is looking increasingly likely.
Meanwhile the housing bubble keeps expanding while the stock market shrugs off the expected hikes.
For more on housing, please see 2021 Set New Annual Records for Home Prices. 2022 Continues the Trend.
This post originated on MishTalk.Com.
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