YC2YR 2-10 Yield Spread; Yield Curve Flattens to 10-Year Low

YC2YR is the 2-10 Treasury yield spread. The yield curve can be assessed in different ways the 2-10's and 5-30's are two of the favorites. Most on Wall Street monitor the 2-10 closely. This morning, the 10-year Treasury note yield is at 2.33% and the 2-year yield is at 1.63%. Subtracting the two is 0.70% which is 70 basis points or 70 bips.

Yesterday the 2-10 spread narrowed to 69 bips; a 69-handle! This is the lowest spread in a decade. Note that the yield curve was inverted into the October 2007 stock market top. Inversion is a fancy word that means the 2-year yield moves above the 10-year yield. A yield curve inversion precedes a recession. Thus, many market participants are concerned about the decreasing spread now occurring. Banks cannot make as much money if the yield curve flattens; they need a wider spread.

You can see some congestion in the 0.40 to 0.65 area from late 2007 so this may serve as a soft landing and firm support for the yield curve; 40 to 65 bips. If it is lost, the yield curve will invert and troubling times will be ahead for the world's economy and stock markets.

Since the central bankers are pumping all asset classes around the world uniformly higher for nine years, the whole house of cards will likely retreat together. The central bankers have destroyed the expected business and economic cycles with nine years of obscene Keynesian money printing schemes. 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.