10-Year Treasury Yield Falls to 3.710%
The 10-year yield declined 0.200 percentage point to 3.710% this week. The longest inverted yield curve on record may finally be in the rearview mirror.
The yield on the 2-year note closed at 3.651%, according to Tradeweb, lower than the 10-year yield, which settled at 3.710%.
The last time the shorter-term yield settled below the longer-term one was July 1, 2022, although the two yields had briefly reversed positions on an intraday basis earlier in the week.
For decades, an inverted yield curve–in which longer-term Treasury yield less than short-term notes–was taken as a signal that a recession was looming, if not necessarily imminent.
Often, the yield curve has un-inverted just as recession was starting or about to begin, with short-term yields falling faster than longer ones in anticipation of aggressive rate cuts by the Federal Reserve.
This time has already been different, given that the inversion lasted for a record stretch even as the economy remained in good shape.
The inversion’s end could still spell trouble. As in the past, it has happened amid signs of slowing economic growth and as investors have ramped up bets on rate cuts.
But it hardly guarantees a recession. On Friday, short-term yields dropped substantially after a weak, but not terrible jobs report, while longer-term yields fell only slightly.
Taken together, the moves suggested the jobs data might have been enough to push the Fed to cut rates more quickly, but not so bad that it meant investors needed to rush to buy safer assets. #10-Year Treasury Yield Falls to 3.710%
