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Traders See Key Part of Treasury Yield Curve Inverting by June

https://www.bloomberg.com/news/articles/2022-03-21/traders-see-key-part-of-treasury-yield-curve-inverting-by-june

Treasury forwards are pricing in that two-year yields will be at about 2.29% by June, one basis point more than the expected yield on 10-year bonds in similar contracts. That gap is up slightly from 0.4 basis points on Friday, when the forward market priced in such an inversion in that segment of the yield curve for the first time since 2007.

The pricing in the forward contracts contrasts with the spot Treasury market, where 10-year yields are holding above 2-year rates. But that gap has narrowed to about 0.22% from as much as 1.62% a year ago as traders anticipate that the Federal Reserve’s monetary tightening will slow growth or even tip the economy into a recession.