The difference between the 10-year and 2-year Treasury rates narrowed to 47 44 basis points on Monday (April 16) – the smallest gap since late-2007. The last time this widely followed spread was this close to zero the US economy was close to a recession. Is this indicator flashing a similar warning today? No, according to a broad reading of the economic data, which reflects a healthy trend. The question is whether the narrowing yield spread is still a reliable late-cycle warning that the macro profile will weaken in the months ahead?
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Treasury 10yr/2yr yield curve continues to flatten, easing to 44 basis points: