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Powell Says Look at Short-Term Treasury Yield Curve for Recession Risk

  • Fed chair pointed to spread between 3-month, 18-month forward
  • Treasury 5-to-30-year yield spread is at the least since 2007
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Powell Says Fed Will Raise Rates Faster If Necessary

Federal Reserve Chair Jerome Powell on Monday weighed in on a major topic of debate in the bond market: where to look to determine the chances for a U.S. recession.

Some investors have been calling attention to a rapidly shrinking spread between two-year and 10-year Treasury yields to sound the alarm on a looming economic downturn. But Powell preferred a different measure of the yield curve that isn’t yet flashing a warning sign.