2s10s weekly
US 2-year notes now yield less than 10-year notes. Aside from a brief move at the start of August, this would be the first move to a positive-sloping yield curve since the inversion in July 2022.
It comes with US 2s down 10 basis points today to 3.79% while 10s have moved down 5.5 bps — also to 3.79%. The drop is the result of a soft JOLTS job openings report, highlighting that the Fed may need to cut rates sooner.
The market is now pricing in 108 bps in easing in the three remaining Fed meetings this year.
Historically, it’s when the yield curve dis-inverts is when you see trouble in the economy begin to hit. It’s also a negative sign for equities.