Inversions are virtually perfect at predicting bear markets.
That's the bad news. The good news is that the inversion is very small at this time, and could go away.
The chart linked below is interactive: There is a slider for the Tail length, and there is a red vertical line to the right of the $SPX chart that can be grabbed and slid back and forth -- hint, you can only grab it when your mouse cursor is inside the chart. Slide that line back and forth to observe how previous bear markets were signaled.
It is believed that inversions predict bear markets 100% of the time. Personally, I don't know if that is accurate when the yields are as low as they are -- 2Y and 5Y are around 2.3%. Who's going to trade their stocks in for such low yields on treasuries?
But I do think that this is one reason why the Treasury department has backed down a little on raising treasury rates. Play with the two controls (slider below left chart, and vertical red line at right chart).
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