5s30s falls to flattest since the crisis
The Fed is wrong.
That's what the yield curve has been screaming for the past few months. You never want to be compared to 2007 but the 5s30s yield curve is now at 95 basis points, which is the flattest since December 2007.
An inverted yield curve is the all-time best recession signal. The thing is, it's very difficult to make happen with interest rates at 1%.
It's not just 5s30s as well. 2s30s recently hit a similar mark and 2s10s isn't far off.
The caveat is that all the Fed meddling and foreign QE skews all the signals. But that's the kind of thing they always come up with the yield curve flattens out.
The one I think that could invert is 2s5s, especially if the Fed hikes this year and hints at more. That would put a line under twos near 1.4% but if oil falls or inflation gets tripped up, 5s could fall below on recession/deflation worries.
