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

Image placeholder title

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

Image placeholder title

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

Steepening or Noise?

Image placeholder title

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


What About Recession Risk?

Image placeholder title

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

Image placeholder title

Image courtesy of Pater Tenebrarum at the Acting Man blog.

Related Articles

  1. Gold Shorts About to Get Burned
  2. Fed Minutes Suggest Gradual Rate Hikes Coming: Little Market Reaction

In regards to the above articles, shorts are piling on in belief the Fed will keep hiking and gold is doomed. The boat is massively lopsided and is about to tip over.

Mike "Mish" Shedlock

Yield Curve Steepens but Recession Risks Haven't Faded

The yield curve has steepened considerably in the past month. Some think it means recession risk has diminished.

Yield Curve Bear Steepener?

Minyanville Prof. Bennet Sedacca is writing about the Bear Steepener.

Checking Back In on the Yield Curve

It's been about a month since I last posted on the yield curve. Let's take a current snapshot.

Yield Curve Steepens Dramatically: What's Going On?

US treasuries are seeing action we have not seen for a while: Strong sharp steepening of the yield curve.

Yield Curve Steepening and Flattening: It Depends on Where One Looks

Some claim the yield curve is flattening, others say steepening. The steepening side has more merit starting January 2.

Treasury Yields Surge, Curve Steepens, 30-Yr Yield Highest Since 2012: 6 Reasons

Treasury yields blasted higher today and the curve steepened as well. Let's investigate why.

Debate over the Yield Curve: Is it Steepening or Flattening?

A recent Wall Street Journal story stated that “A flattening of the Treasury yield curve in 2017 is a worrying sign for investors banking on resurgent U.S. inflation and growth.”

Yield Curve Steepened Since January 3 but Portions Remain Inverted

On Jan 3, portions of the yield curve inverted with the Fed Funds rate. That's gone, but other inversions remain.

Flattening Yield Curve in One Picture

The flattening yield curve is a topic of much discussion. The lead chart shows various spreads it in one picture.