Treasury yield curve flattening continues

• The yield curve, spread between the 10-year and 2-year yield, is flattest since 2007.
• Curve inversion is widely considered a precursor to a recession.

The spread or the gap between the US 10-year treasury yield (10s) and the 2-year treasury yield (2s) has dropped to 19 basis points – the lowest level since 2007.

Meanwhile, the spread between the 10s and 7s currently stands at 4 basis points and risks inversion, that is, the 7-year note could soon yield more than the 10-year note.

Curve inversion is considered by many a sign of impending recession.