Yield Curve Recession Watch: 7-Year Treasury Yield Inverts With 1-Year
Mike Mish Shedlock
Strong Recession Signal
Today, the 1-year T-Bill rate inverted with higher duration notes up to and including the 7-year note. I count 6 inversions, 4 of them with the 1-Yr bill.
A 1-year T-Bill inversion with the 10-year note is only 8.5 basis points away.
This is the strongest recession signal yet.
Despite the flattening and now inverting yield curve, note that the spread between the 10-year and 7-year bond actually rose over the course of 2018.
The spread between the 30-year long bond and the 10-year note is nearly what it was a year ago.
I believe this is a strong bond market signal that the end of the bond bull market approaches. It's possible it's already over. But I do expect one more strong push lower in yields as recession hits in 2019.
We have enormous deficits as far as the eye can see from a starting point of $21 trillion in debt.
Mike "Mish" Shedlock