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Yield Curve Inversion Hits Record Levels

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The yield curve inversion between 2- and 10-year Treasury yields plunges to minus 82.5 basis points, hitting its most inverted level since 1981.

yield inversion

The recent yield curve inversion has been a hot topic in the markets. On Thursday morning, the spread between 2- and 10-year Treasury yields plunged to minus 82.5 basis points, just shy of hitting its most inverted level since Oct. 1981. This is the widest inversion since the early 1980s and it has raised some serious questions about the global economy.

The yield curve inversion has been seen as a harbinger of recession, and investors have been closely monitoring its movements. The yield curve inversion revisited its widest point since 1981 on Thursday morning, and it is a sign that investors are becoming increasingly concerned about the state of the economy.

The inverted yield curve may not be the reliable crystal ball that corporate executives and financial policy makers act like it is. As the economy continues to improve, the yield curve inversion could be a sign of irrational investor behavior rather than an indication of a looming recession.

The outlook for the U.S. economy is brightening in recent weeks, but the Treasury yield curve is near its most deeply inverted level in at least 37 years. US government bond investors pushed two-year yields above 10-year yields by the widest margin since the early 1980s Thursday.

The yield on the 10-year Treasury note fell to 1.83%, while the two-year yield was at 1.94%. The gap between the two yields is now at minus 0.11 percentage points, the most inverted level since October 1981.

It's a long time since we've been so inverted. The explanation might not be what you think. Conventional wisdom says yield curve inversion is a sign of an economic slowdown, but this time it is more nuanced. Low interest rates are driving the inversion, not necessarily a fear of future economic headwinds.

Mark Cudmore and Anna Edwards break down today's key themes for analysts and investors on 'Bloomberg Markets Europe'. They explain the current yield curve inversion and how it could impact the markets in the coming weeks.

Yield curve inversion has been a reliable indicator of recession in the past, but this time it could be different. Low interest rates and market sentiment could be playing a bigger role in the current inversion, and that could mean the markets are not as bearish as they seem.

By Yasin Ebrahim. -- The S&P 500 fell Thursday, reversing intraday gains as an ongoing slip in Alphabet (NASDAQ:GOOGL) and other large-cap stocks weighed on sentiment. The index was down 0.7% to 2,902.25 as of 10:00 AM ET (14:00 GMT).

The yield curve inversion has been a major theme in the markets, and it could have a significant impact on the markets in the near future. investors are closely monitoring the inversion and weighing the potential implications.


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