2/10 just inverted…. does it matter?

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I’ll let you know in 12-18 months


According to the current market, literally nothing matters.


From a psychological standpoint it’s a significant event, especially if it remains inverted for some time. From a fundamental standpoint there’s nothing magical about the spread being -0.02 vs 0.02. As the curve flattens and becomes inverted the spread banks can generate shrinks. There’s a lot of theory that an inverted curve is a self fulfilling prophecy since it results in an evaporation of credit which obviously poses a significant drag on growth. But it’s not like that condition magically appears once the 2/10 or even 3mo/10 spreads cross below 0.


What I find significant is this happened after “good news” IE trump delaying some tariffs on China which should had reduced pressure on inversion but didn’t. Bonds are def saying something that equities aren’t.


It’s the third horseman. The fourth will be a sudden spike in layoffs. Watch the jobs data and be defensive.