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Treasury Market Calls Time on Fed Hikes as Curve Finally Inverts

  • 10-year rate sinks below 3-month rate for first time since ’07
  • New manufacturing data hinder already-weak case for tightening
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What the Inverted Yield Curve Means for Equities

The inversion of the Treasury yield curve shows bond traders see a worsening economy pushing the Federal Reserve to make its next interest-rate move a cut, even if officials seem reluctant to concede that just yet.

U.S. central bankers sent interest rates plunging on March 20 by slashing their projections for future increases. Weak European and American manufacturing data two days later cemented the notion that their tightening campaign may be over, with yields on 10-year Treasuries slipping below 3-month rates for the first time since 2007.