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Treasury Yield Curve Inversion Has Scope to Deepen, BofA Says

  • Degree depends on expected peak in Fed’s policy rate
  • Two-year bond yield is almost half-point higher than 10-year
Updated on

The US Treasury yield curve could invert more deeply than at any time since the 1980s, if Bank of America’s estimates about the impact of Federal Reserve policy expectations are accurate.

“The extent of inversion will depend on the terminal rate, which will likely be a function of inflation,” Meghan Swiber, director of US rates strategy at BofA, said in a report.