Economics
Treasury Yield-Curve Inversions Flag Caution, Not Recession, Pimco Says
- The 2-to-10-year yield gap and 5-to-30 year are both inverted
- Powell has dismissed 2-to-10’s curve signals on growth outlook
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Treasury-curve inversions shouldn’t be ignored, but aren’t a sure-fire way of signaling that a U.S. economic recession is around the corner. So says Marc Seidner of Pacific Investment Management Co.
“A yield-curve inversion should never be dismissed just because the backdrop has changed,” Seidner, Pimco’s chief investment officer of non-traditional strategies, wrote in a blog post. “The curve’s signal may be less clear than in the past.” Yet some current inversions are “signaling caution, rather than recession.”