Market’s Favorite Recession Indicator Lurches Lower in New Year

  • Gap between 3-month and 10-year Treasury yields has plunged
  • Fed chief Powell’s job has become ‘that much harder’: BMO

Traders return to their desks in the new year with a familiar warning signal flashing even more strongly than before — the Treasury yield curve got even flatter, feeding the market’s worst suspicions about the U.S. economy.

Market watchers noted a dramatic compression in what is arguably the most reliable indicator of recession — the gap between the 3-month and 10-year Treasury yields.

Emily Barrett | Bloomberg

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