Is the bond market worried about a possible recession sometime soon? The yield curve has inverted again, with the inversion between the three-month Treasury bill and the 10-year note widened to its deepest level since the financial crisis. The three-month bill yield rose to 2.362 percent yesterday, while the 10-year note yield dropped to 2.26 percent, its lowest since September 2017.
Under normal market conditions, those that buy debt from the U.S. government for many years get better interest rates than those who loan money for a matter of months. When that inverts, as it has now, many investors and economists believe that the yield curve is sending a warning about economic growth in the United States.
The yield curve inverted once before this year, in March. But before that instance, the yield curve hadn't flipped since 2007 — just before the start of the Great Recession.
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