A widely-followed section of the US Treasury yield curve has inverted for the first time since 2007, telling investors the Fed may cut rates to counter the slowdown in the economy.
The spread between the US 10-year and three-year treasury yield turned negative on Friday and is currently seen at -0.02, the lowest since 2007.
The inverted yield curve is widely considered an advance indicator of recession. That said, the most important section of the US yield curve – the spread between the 10-year and two-year yield – is yet to invert. As of writing, the spread between the two is 12 basis points.
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