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Why the Fed Is Watching the Inverted Yield Curve Again
Season 3
Episode 102
Published 2 days, 20 hours ago
Description
The yield curve has been inverted for over two years — the longest stretch since the 1970s. This episode digs into why the Fed isn't ignoring it, even as many pundits have declared the yield curve 'broken' as a recession signal. Lucas and Luna walk through the mechanics of the 2-year versus 10-year Treasury spread, now at -74 basis points, and what it tells us about the market's expectations for rate cuts versus the Fed's actual stance. They also examine the 3-month to 10-year spread, which has flattened to just 12 basis points, and what that means for bank lending and the broader economy. No hot takes — just a clear look at a signal that still matters, even after two years of inverted curves.