The Treasury yield curve has collapsed since Janet and her band of inverse Robin-Hoods hiked rates into the worst earnings and manufacturing recession since the crisis. In fact, the spread between 2Y and 10Y rates has plunged 15bps since December's FOMC meeting to its flattest since 2008... so we ask simply - Dear Janet, please explain?
"Policy Error" much?
The flattest since 2008...
And while everyone and their cat knows the "butthe yield curve has not inverted and so we can't be in a recession" meme... we show the following chart which may just show a different perspective as the constant manipulation of interest rates over the past 40 years has in fact changed the nature of the absolute yield curve and maybe, just maybe, 120bps is the new "Inverted" and we are in fact "in recession."
Certainly - every industrial (and now some services) indicators are flashing red warning lights.
Charts: Bloomberg



