by Wolf Richter
How does it compare to German, Japanese, and Chinese yield curves?
On Friday, the US Treasury 2-year yield rose to 2.63% and the 10-year yield remained at 2.82%. This squeezed the spread between them to just 19 basis points, the lowest since August 2007.
This is a further step in the “flattening yield curve,” where short-term yields and long-term yields move closer together. Unless the 10-year yield gets on the rate-hike bandwagon and jumps, it might soon be lower than the 2-year yield – a condition called yield-curve “inversion.” This happens as shorter-term yields rise following the Fed’s rate hikes but long-term yields refuse to budge. The way it looks, it is hell-bent on doing just that: