Yield Curve Inversion Watch Chart - Fed Has To Cut!

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If you’re worried about a recession, you should be watching the Yield Curve Inverting.

Historically, an inversion signals a recession, but with a lag.

We can see this on the chart whenever the yield curve hits 0%

This shows the 2Y yield higher than the 10Y which is a signal that the market expects slow economic growth.

To counter-act the inversion, the Fed cuts the EFFR, although they are always late.

One would think that the Fed would learn from history, and get ahead of the curve this time around.

Only time will tell.

I’m cautiously optimistic as Treasury Secretary Bessent has stated that he has a weekly meeting with Fed Chair Powell.

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