2-year Treasury yields up nearly 7 bps to 0.558%
The yield curve in major bond markets is continuing to flatten further on the week, as the short-end is rising at a much faster pace than the long-end today.
2-year Treasury yields are up nearly 7 bps now close to 0.56% while 10-year Treasury yields are up slightly by 2.8 bps to 1.557% after the plunge lower in the latter yesterday.
That has seen 2s10s i.e. gap between 2-year yields and 10-year yields fall below 100 bps for the first time since early August this year. I'd argue that this is the key gauge when measuring yield curve flatness and this is certainly looking rather significant now.
I would say this says a lot about the market view on the economy, that being even if central banks are to hike rates in the short-term, it may snuff out real inflation and at the same time stifle the economy in the macro picture.
Sure, the rate hikes that will come can be reversed, but that just signifies that central banks are floundering all over the place just to keep the economy afloat and not really being able to do much to spur more robust growth conditions.
