15 September 2023
Despite growing confidence in Wall Street and Washington that the Federal Reserve can stabilize the economy, the Treasury market tells another story. For 212 consecutive days, 10-year yields have remained below 3-month yields, a pattern which has historically preceded the last eight recessions. On Thursday, this trend broke a record from 1980, marking the longest such stretch since Bloomberg began tracking in 1962. This contrasts starkly with the resilience of the economy, highlighting the uncertainty since the Fed’s aggressive rate increases in March 2022.