PATH OF US 10Y AND US2 Y/US 10Y SPREAD

18 thg 1, 2022

What is happening with US Treasury interest rates and the spreads betwen the 2 Y and 10 Y have a huge impact on markets. I am not an expert technician by any means, but what I see could be very telling. It looks like we are approaching the next resistance level on the 10 Year and that the 2/10 Year Spread may be heading back down after a brief retracement. Though higher interest rates are generally good for financials, a flattening yield curve is not. That flattening yield curve also predicts slowing economic growth and when it finally inverts (goes below zero), it is an almost fool proof indicator of a coming recession. The interesting thing is the current actions have been caused by just a little tightening and a change in sentiment. What will happen when the Fed actually stops injecting liquidity and starts raising interest rates?