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Uhoh US Treasury yield curve just inverted for the first time since

first_img Share this storyUh-oh, U.S. Treasury yield curve just inverted for the first time since 2007 Tumblr Pinterest Google+ LinkedIn Featured Stories Bloomberg News Twitter More Email advertisement Comment Sponsored By: Recommended For YouJapan ruling bloc to keep simple majority in upper house, may get 2/3- NHK exit pollDavid Rosenberg: Deflation is still the No. 1 threat to global economic stability — and central banks know itTrans Mountain construction work can go ahead as National Energy Board re-validates permitsBank of Canada drops mortgage stress test rate for first time since 2016The storm is coming and investors need a financial ark to see them through The gap between the 3-month and 10-year yields of U.S. Treasuries vanished on Friday as a surge of buying pushed long-end rates sharply lower.Getty Images What you need to know about passing the family cottage to the next generation March 22, 201912:01 PM EDT Filed under News Economy Emily Barrett and Katherine Greifeld A closely watched watched section of the Treasury yield curve on Friday turned negative for the first time since the crisis more than a decade ago, underscoring concern about a possible economic slump and the prospect that the Federal Reserve will have to cut interest rates.The gap between the 3-month and 10-year yields vanished on Friday as a surge of buying pushed long-end rates sharply lower. Inversion is widely considered a reliable harbinger of recession in the U.S. The 10-year slipped to as low as 2.439 per cent.U.S. central bank policy makers on Wednesday lowered both their growth projections and their interest rate outlook, with the majority of officials now envisaging no hikes this year. That’s down from a median call of two at their December meeting. Traders took that dovish shift as their cue to dig into positions for a Fed easing cycle, pricing in a cut by the end of 2020 and a one-in-two chance of a reduction as soon as this year. Rate cut seen on horizon as Canadian bonds due in more than a decade yield less than cash Explosion of global debt biggest risk to world’s financial system, Bank of Canada warns March is going to be a huge month for the world economy, and it may lead to a dreary spring “It looks like the global slowdown worries have been confirmed and the market is beginning to price in Fed easing, potential recession down the road,” said Kathy Jones, chief fixed-income strategist at Charles Schwab & Co. “It’s clearly a sign that the market is worried about growth and moving into Treasuries from riskier asset classes.”A wave of buying drove the 10-year yield to fresh lows for the year. That yield has fallen as much as 17 basis points from the close on Tuesday, the day before the Fed decision. Weaker-than-expected European factory data that helped drive benchmark German yields back below zero on Friday also supported the move.Related Stories:POLL-Era of low sovereign yields to last at least two more yearsGroping for new tools, central banks look at Japan’s yield controlsYield curve flattest since May as market awaits Fed guidanceThe 3-month to 10-year curve is widely favoured as an indicator that the economy is within a couple of years of recession. But Friday’s move is an extension of the inversion at the front end of the curve that happened in December. The gap between the 2-year and 10-year yields has also narrowed, to around 10 basis points.With assistance from Elizabeth StantonBloomberg.com Join the conversation → Reddit Uh-oh, U.S. Treasury yield curve just inverted for the first time since 2007 Inversion is widely considered a reliable harbinger of recession Facebook 13 Comments ← Previous Next →last_img

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