Brian Chappatta, Columnist

The Fed’s Key Yield Curve Inverted Again. Watch Out.

While a recession is hardly a guarantee, previous episodes have forced the central bank’s hand.

January 30, 2020 at 4:59 PM UTC

Brian Chappatta is managing editor of Bloomberg News' leveraged finance and distressed debt teams. He was previously managing editor and team leader of its wealth group. Before that he was a Bloomberg Opinion markets and finance columnist and a bonds reporter for Bloomberg News.

Caution required.
Photographer: Marijan Murat/DPA/AFP/Getty Images

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I’m not an alarmist when it comes to the yield curve.

However, it can’t go unremarked that the spread between three-month and 10-year U.S. Treasuries inverted on Thursday for the first time since October. The curve has flattened toward zero all month: Short-term rates have stayed steady with Federal Reserve policy, while longer-term yields have tumbled amid mounting evidence that the deadly coronavirus is harming the outlook for global economic growth.