- The US bond yield curve has flattened for nine straight days.
- The curve is 15 basis points away from inversion.
- Experts believe a sustained curve inversion is unlikely.
The US bond yield curve, as represented by the spread between the 10 and the two-year treasury yield, is flattening again.
The curve flattened for the ninth straight day on Friday, as noted by Bloomberg’s Lisa Abramowicz. That is the longest stretch of curve flattening since November 2015.
Notably, the 10-year yield is now 15 basis points away from tumbling below two-year yields. That would amount to yield curve inversion. In the past, curve inversions have preceded economic recessions.
That said, there is growing feeling in the analyst community that the global economy has skirted recession and the likes of TD Securities and NatWest Markets are now expecting curve steepening in the US bond market. BlackRock expects overall steepening in countries including the US and UK, according to Bloomberg.
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