Q: Since july 2022 the U.S 10/2 year bond yield is no longer inverted what should we take from that, if any thing?
5i Research Answer:
The yield curve has steepened as traders have started to anticipate faster rate cuts. This is pretty much the exact opposite of the 'higher for longer' mantra. Thus, if an inverted curve is 'bad' then a steepening should be 'good'. It is not quite so simple, though, as it is higher recession fears that are causing the shift.