The Yield Curve Should Be Flatter, According to BNP Paribas
Shadow Fed fund rates are a better gauge of monetary tightening.
An allegorical depiction of the U.S. yield curve.
Source: Walter Robinson via BloombergThis article is for subscribers only.
The U.S. yield curve has been doing its best impression of a pancake in recent weeks.
Matt Boesler of Bloomberg News points out that the spread between the yield on 10-year U.S. Treasury notes and two-year notes is now the narrowest since 2007. The flattening yield curve has prompted a wave of commentary from economists, some of whom say that it signals increased odds of a U.S. recession.