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Market history · Bonds ·

The yield curve inverts

On 14 August 2019 the US 2-year Treasury yield rose above the 10-year yield, a closely watched signal because inversions have preceded every US recession since the 1970s. The 3-month/10-year curve had inverted in March.

A recession did follow in 2020, but it was caused by the pandemic rather than the mechanism the curve is thought to signal, and the timing lag between inversion and recession has varied widely.

The takeaway

A good indicator is not a timing tool.

Asset classes:Bonds

This is a retrospective about a past event, provided for general information. It is not investment advice, does not describe RockLake's positioning at the time, and past performance is not a guide to future performance. Read the risk warning.

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