In its policy decision today, the Fed was hoping to steepen the long end of the yield curve. The opposite happened as rates at the long end fell.

Note: The Effective Fed Funds rate will not be available until tomorrow. I estimate it to be 2.15 % down from 2.40% yesterday.

Interest Rate Spreads After the FOMC Announcement

Image placeholder title

Arrows indicate inversions.

In the following chart, I pay particular attention to the inversion between the 10-year note and the 3-month note.

Interest Rate Spreads Prior to FOMC Announcement

Image placeholder title

RECOMMENDED ARTICLES

The spread between the 10-year note and the 3-month bill was a mere -1.3 basis points ahead of the announcement. It is now -7.1 basis points.

So much for the notion a rate cut would steepen the curve.

Yield Curve Following Decision

Image placeholder title

Following the decision the Rate Cut Odds Shrank Dramatically.

I don't buy it. This is a recessionary reaction.

Expect more cuts than are priced in.

The bond market does not believe Powell's "Mid-Cycle" Adjustment speech following the announcement and neither do I.

Mike "Mish" Shedlock

Bond Yields Crash On ISM Report, More China Tariffs: Inversions Strengthen

The long end of the yield curve continued its post-FOMC decline on poor manufacturing reports and new Trump tariffs.

Yield Curve Update: 10-Year vs 1-Month Inversion Persists

The yield curve inversion persists and even widened, selectively.

First Inversion in Seven Years: Can a Recession be Far Off?

The 5-year to the 3-year portion of the yield curve inverted today. Inversion is typically a prelude to recession.

Reader Questions on Yield Curve Inversions as a Recession Indicator

Reader Eric is curious about yield curve inversions. He writes …

Inversions Galore!

The number of US Treasury bond inversions took a big leap today. I count 5 inversions, three of them with the 1-Yr bill.

St Louis Fed Suggests Foolproof Way to Prevent Yield Curve Inversion: Don't Hike

The St. Louis Fed president Jame Bullard has a spotlight on yield curve inversion, and he wants to prevent one.

Deepening Global Inversions: Canada Joins the Club

Yield curve in inversions in Canada widened in response to Trump's impositions of Tariffs on Mexico.

Yield Curve Inversion Coming Up?

Several readers asked me to comment on the possibility of a yield curve inversion.

Near Full Inversion: 10-Year Note Inverts With 1-Month T-Bill

The yield curve nears full inversion. Every duration higher than 1-month other than the 30-year long bond is inverted.