The U.S. bond market recently sent an exclusive warning & it was heard to by the declining stock market. On Wednesday, the yield for 10-year long U.S. Treasury briefly traded way below the 2-year Treasury note. This marked the inversion of yield curve towards negative. This particular phenomenon is seen as the reliable indicator for recession in the future.
Not just that, the yield for 10-year Treasury has actually traded way below the T-bill for the 3 months since the month of May. The inversion of this particular portion for the curve has been seen by the economists as something more than just the recession indicator.
The latest twists to the degrading economic data came with the intensifying trade war between U.S. and China. This new inversion doesn’t actually guarantee than there is an impending doom. Rather, it serves as the headline warning about things that have been depleting the economic line in the past few months, mentioned Joe Mallen, the Chief Investment Officer working with Helios Asset Management. This company manages around $16 Billion when it comes to combined assets for the advisers.
Mallen also mentioned that the higher authorities are now justifiably concerned about the impending recession to take over the country in the upcoming two years.