Treasury Yields Signal Increasing Recession Fears

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Treasury Yields Signal Increasing Recession Fears

The two-year yield rises while the 10-year wobbles, widening a curve inversion often seen as a sign investors are bracing for recession. Pundits have all but ruled out a dovish 50-basis point rate increase next week, with 100bp becoming the alternative to a more likely 75bp hike. “The widening of the spread between the 2 and 10 TSY clearly indicates a full-blown recession by year end,” Spartan’s Peter Cardillo says in a note. The overall concern is that monetary tightening would lead to economic contraction. Downbeat corporate outlooks reinforce those concerns. The two-year yield reaches 3.901% and the 10-year is at 3.470%.