Treasury Rates

Higher and higher

Let’s take a look at the shorter-end of the yield curve:

Right now, the two-year rate is above the ten-year rate, which is also known as a yield curve inversion. That’s not normal!

In a more normal market environment, you would see higher rates in longer-dated maturities as a compensation for the risk inherent in longer-term investments.

With short-term rates higher than long-term rates, the market is demanding a higher premium because they expect more risk in the near future. This will probably come in the form of a recession but…even if we don’t use that word we can just say that it implies some not-so-good times ahead.