Will US Treasury curve invert?

January 17, 2018 11:57 AM

Since September 2017, the Treasury 5-year/30-yield spread has been on a trajectory toward zero at a pace of roughly 14 basis points per month. If this pace is maintained, the spread should move to negative no later than late-February.   

To be clear, I am not stating emphatically that the US Treasury 5’s-30 yield curve will not invert by the end of February. Instead, I’m simply arguing that a growing majority expect a negative yield curve soon. Finally, consider please that as consensus reaches a greater majority, it cannot help but to collect a greater percentage of less gifted prognosticators.     

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About the Author

Martin McGuire, managing director at TJM Institutional Services