The US Treasury yield curve has inverted again, based on the 10-year less 3-month spread. The difference between maturities was a slightly negative -0.03. Historically, a negative spread implies that recession risk is elevated for the near term, although this widely followed indicator doesn’t have a perfect record. The only blemishes on its record are the 1998 and mid-2022 inversions, which produced no subsequent economic recessions. Most recently, the curve inverted in 2022 and 2023 without leading to a recession.
