, Columnist
The Yield Curve Moves to a Fatal Dis-Inversion
As a sign of recession, this is when the relationship between two-year and 10-year Treasuries really gets dangerous.
Stormy harbinger for the yield curve? Above: Near Santa Ynez, California.
Photographer: George Rose/Getty
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For 15 months now, the yield curve has been inverted. In English, that means 10-year Treasury bonds have been yielding less than two-year bonds, even though investors normally require an extra yield for the extra risk for investing over long periods. As is now widely known, an inverted curve is one of the strongest recession indicators there is. An inversion so protracted implies serious problems afoot.