US 2s10s weekly
The yield curve inverting has an unblemished track record of predicting a US recession since 1955. However it's not the curve inverting that signals the recession is here; it's when the curve un-inverts that it means the recession is here.
Think of it like a hurricane forecast. The inversion is a storm forming in the Atlantic, the un-inversion is when it makes landfall, particularly in a front-end led bull steepener.
We won't see the recession until it filters through into economic data but the market is certainly wilting. Beyond the slope of the curve, US 2s are down 20 basis points at 3.66%. Nominally, that's 170 basis points below Fed funds and that kind of rate cutting doesn't happen without real trouble in the economy.
