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Why the Fed Is Watching the Yield Curve Uninversion
Description
The yield curve has been inverted for over two years — the longest stretch in modern history. But in recent weeks, the 2-year and 10-year Treasury spread has narrowed to just a few basis points. On this episode of The Federal Reserve Podcast, Lucas and Luna unpack what a potential uninversion means for the Fed's next move. They discuss the historical track record of curve uninversions as recession signals, why this cycle's inversion has been so stubborn, and how the current data — including a 4.47% 10-year yield and a Fed funds rate at 3.62% — is reshaping the policy debate. Plus, a look at how the ECB's recent rate hike and sticky core CPI are complicating the picture. If the curve normalizes this summer, does it mean the soft landing is real — or is it just the calm before the storm?