Messages from the Market

One term spread steepens sharply; only one spread has actually inverted. The five year inflation breakeven is falling. And risk is rising. Figure 1:  Ten year-three month Treasury spread (blue), ten year-two year spread (red), both in %. Source: FRB via FRED, Treasury, and author’s calculations. Spreads have increased recently, so peak recession probabilities from … Continue reading Messages from the Market