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Hello Curve Watchers, We Have a 5 Basis Point Inversion to Discuss

The 20-year yield is 1.98% and is 5 basis points higher than the 30-year rate at 1.93%. This is a 5-point inversion.
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Yield Curve 2021-10-29

Yield Curve Notes

  • Data is as of the market close on Friday, October 29.
  • The chart is to scale. Every bar is 3 months with the Fed Funds Rate representing 0 months. 
  • I extrapolated the values between numbers uniformly.
  • The 20-year yield is 1.98% and is 5 basis points higher than the 30-year rate at 1.93%. This is a 5-point inversion.
  • The Fed Funds Rate is also inverted with the 3-month rate at 0.05% and the 6-month rate rate at 0.07% but those inversions are not as meaningful.

I suspect the 7-10 year range will be the next to invert as there is only 11 basis points between the numbers. 

Inversion is neither a necessary nor sufficient condition for recession but most recessions do start with inversions. 

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The inversions are tiny at this point but worth watching. 

Thanks for Tuning In!

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