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Treasuries Buying Wave Triggers First Curve Inversion Since 2007

  • Gap between 3-month and 10-year U.S. yields vanishes Friday
  • Move follows Fed policy shift, gloomier economic signs
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Krishna Guha, head of central bank strategy at Evercore ISI, discusses the inverted yield curve.Markets: European Close." (Source: Bloomberg)
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The Treasury yield curve inverted for the first time since the last crisis Friday, triggering the first reliable market signal of an impending recession and rate-cutting cycle.

The gap between the three-month and 10-year yields vanished as a surge of buying pushed the latter to a 14-month low of 2.416 percent. Inversion is considered a reliable harbinger of recession in the U.S., within roughly the next 18 months.