YC2YR US Yield Curve (2-10 Spread) Daily Chart; US Yield Curve Inverted for Over 2 Years the Longest Period in History; Recession?; YIELD CURVE DIS-INVERTS FOR FIRST TIME IN OVER 2 YEARS

Keystone has been tracking the yield curve and the last post on the chart chronicles the crazy path to the present day. In March 2022, the spread fell below zero indicating inversion but it quickly recovered. In June 2022, the yield curve inverted and it has remained that way for over 2 years the longest period in history.

You look like Rip Van Winkle if you have been watching the yield curve waiting for the recession to arrive. The overall widespread US recession remains on vacation with Godot despite the ongoing housing recession, manufacturing recession and labor recession in play. Go figure. The wealthy, that were made filthy rich by the Federal Reserve's money-printing, have lots of dough to spend to keep the economy afloat in the US toilet bowl.

After the inversion, everyone including the Uber driver, said the recession was at hand. Keystone figured it made more sense for the recession to arrive sooner rather than later but it did not. Common Americans do not have a pot to pee in but the wealthy elite, and the upper middle class sycophants that live in McMansions and service the privileged, are keeping the economy afloat with their spending. That will not last forever and the signs are there that spending is getting pulled-in.

Usually when the yield curve inverts, the recession shows up 18 to 24 months later, and sometimes sooner. This time was not sooner due to the obscene money-printing by the Federal Reserve that created a mass wealth effect for the top 10% of the population that is carrying the whole economy with their spending. America's crony capitalism system makes the rich richer, since they control the rigged game, and the poor poorer. Alas, the 18 and 24 months periods are now in the rearview mirror and the recession remains on a milk carton (missing). Runaway Train.

What next? Simply considering time as the variable, the recession should be at hand and may have already started. The Sahm Rule triggered on Friday which indicates that the recession is at hand right now even though Sahm disputes her own rule. Win Sahm, lose Sahm.

It is not the inversion that solely triggers/confirms a recession. After the inversion, you want to see a hook pattern form where the spread moves higher again, without significant interruption. Over the last 2 years, each time the hook forms and it looks like it has legs higher, thwack, it is smacked like a donkey's behind. This is why the recession refuses to appear; the spread rolls back over each time it shows a sign of recovering. After over 7 times at bat, is this the sustainable move higher? It almost has to be since the curve is only 10 bips from dis-inversion (moving back above zero).

Lots of analysts still call for a soft landing of the economy. Most of them are the sycophants that service the wealthy so consider the rose-colored glasses they look through each day. The illusion of a soft landing is due to the ongoing spending by the top 10% of the population that own stocks and took advantage of the Fed's easy money policies over the last 15 years. Always remember that one-half of Americans do not own a single share of stock so the Fed members taking those dovish actions all those years knew they were enriching the wealthy while screwing the poor. They have to live with themselves. Isn't America great?

The -0.13% level was key resistance that has now given way so it becomes support. It would not be surprising to see the yield curve dis-invert in the days ahead. Bloomberg has the 2-year yield at 3.88% and 10-year at 3.79% so that means the 2-10 spread is inverted by only -.09% or -9 bips. It is a whisker from dis-inverting which will be a major event. Do you smell that? No, not that. That smells like teen spirit. Take another whiff. Yes, it smells like recession is in the air. This information is for educational and entertainment purposes only. Do not invest based on anything you read or view here. Consult your financial advisor before making any investment decision.

Note Added Sunday Evening, 8/4/24: The cascading global stock market selloff, quickly becoming a crash, continues rotating around the world. The US yield curve (2-10 spread) is up to -4 bips a hair from dis-inversion, and recession. The 2-year yield is 3.76% and 10-year yield 3.72%.

Note Added Monday Morning, 8/5/24, at 3:30 AM EST: The US yield curve (2-10 spread) is at -4 bips a hair from dis-inversion, and recession. The 2-year yield is 3.79% and 10-year yield 3.75%.

Note Added Monday Morning, 8/5/24, at 4:40 AM EST: Traders now estimate a 60% chance that the Federal Reserve will cut 25 bips within the next week. Oh my. That is panic. If the Fed would do that, it would create panic that the economy is far worse than thought, however, investors are already panicking running around with their hair on fire during the global stock market rout since Thursday. The US yield curve (2-10 spread) is at -4 bips a hair from dis-inversion, and recession. The 2-year yield is 3.81% and 10-year yield 3.77%. 

Note Added Monday Morning, 8/5/24, at 7:03 AM EST: The US yield curve (2-10 spread) is at -1 bip almost dis-inverted (bull steepener) and probably, finally, signaling recession. The 2-year yield is 3.7581% and 10-year yield 3.7435%. The S&P futures are down -148 points, -2.8%. VIX is 50+.

Note Added Monday Morning, 8/5/24, at 7:33 AM EST: The 2-year and 10-year yields sit at 3.73% remaining only one tiny hair inverted. The S&P futures plummet -163 points, -3%, to the lows of the session. VIX 50.68. NVDA pukes -13%. MSFT collapses -7%. Bitcoin is at 50,947.

Note Added Monday Morning, 8/5/24, at 8:42 AM EST: The 2-year is at 3.6559% and 10-year yield is at 3.6672%. Sound the Seven Trumpets!!  THE US YIELD CURVE DIS-INVERTS FOR THE FIRST TIME IN OVER 2 YEARS. Normalcy returns with the 10-year yield a single hair above the 2-year yield.

Note Added Monday Evening, 8/5/24, at 6:02 PM EST: If you blinked during the dis-inversion of the yield curve, you missed it. The yield curve re-inverted quickly this morning with the spread widening again. The 2-10 spread then dropped from the slightly positive number back down to the -0.13% support. The 2-year yield is at 3.92% and the 10-year yield is at 3.79%. The zero level and dis-inversion is obviously a big deal so it would be expected for yield to stab at the zero resistance once or three times before thrusting up through. The spread likely re-inverted as traders believe that a 50-bip cut is likely not coming. The hook pattern is continually spanked back down delaying the recession.

Note Added Tuesday Morning, 8/6/24, at 4:32 AM EST: The 2-year yield is at 3.97% and the 10-year yield is at 3.85%. The spread is at -0.12%. The back kiss is successful so far; the -0.13% support is holding.

Note Added Tuesday Afternoon, 8/6/24, at 4:15 PM EST: The 2-year yield is at 3.98% and the 10-year yield is at 3.90%. The spread floats higher to -8 bips. The back kiss is successful so far; the -13 bip support is holding.

Note Added Wednesday Morning, 8/7/24, at 4:32 AM EST: The 2-year yield is at 4.00% and the 10-year yield is at 3.91%. The spread is at -9 bips. The -0.13% support is holding. The spread has been at -9bips, with that brief increase to -8 bips, for the last half-day as the yields fluctuate up and down. The BOJ stepped in verbally to weaken the yen and create lift in US stocks.

Note Added Wednesday Morning, 8/7/24, at 9:09 AM EST: The 2-year yield is at 3.99% and the 10-year yield is at 3.93%. The spread is at -6 bips. 

Note Added Wednesday Evening, 8/7/24, at 8:33 PM EST: The 2-year yield is at 3.96% and the 10-year yield is at 3.94%. The spread is at -2 bips. Only 2 measly bips from complete dis-inversion, and recession.

Note Added Thursday Morning, 8/8/24, at 8:50 AM EST: The 2-year yield is at 4.04% and the 10-year yield is at 3.99% after the US Jobless Claims happy data. The spread is at -5 bips. 

Note Added Friday Morning, 8/9/24, at 3:18 AM EST: The 2-year yield is at 4.02% and the 10-year yield is at 3.96%. The spread is at -6 bips.