Economics
Citi Sees Bet on a Steeper Yield Curve as Best Recession Trade
- An economic downturn could see Fed likely to cut rates rapidly
- Curve trade has been a reliable performer over previous cycles
This article is for subscribers only.
Betting on a steeper U.S. yield curve is the best way to trade any 2020 recession, according to Citigroup Inc.
While the bank doesn’t expect a marked slowdown next year, a thought exercise by strategists including Jeremy Hale suggests a two-year, 10-year Treasury curve steepener trade is better than a short-equities position for investors who expect a U.S. recession beginning in May.