The chart shows the spread between the 10-year treasury yield and the two- and five-year treasury yields. The steepening is hard to spot so let's hone in.

Detail of Yield Curve Steepening

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Wait a second you say. The short end is not rising but the long end is. Yes, sometimes. I have a picture from October 17.

Steepening Yield Snapshot

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Let's add the 3-month set of data points and investigate further.

Steepening or Noise?

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Let's not confuse random noise nor a rise in yields across the board with a steepening yield curve.

What About Recession Risk?

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Some believe recession risk is minimal because the yield curve is steepening and there has been no inversion.

In regards to steepening, there is not much credence except in isolated incidents like that shown in the "Steepening Yield Curve Snapshot".

In regards to inversion, there is no rule that says the yield curve must invert before before recession. Japan provides an excellent example.

Japan Recessions

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Image courtesy of Pater Tenebrarum at the Acting Man blog.

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