The yield curve has now flattened into the danger zone

Quick post here. I caught a tweet by Bloomberg's Lisa Abramowicz this morning noting that the yield curve was at its flattest since the Great Financial Crisis. Looking at the data, I noted that the 10-year bond is trading at only 49 basis points more than the 2-year bond. That is under the 50 basis point threshold I set out in November.
Curve flattening from unresponsive back end
All of the action has been at the front of the curve where the Fed has the most control.

Source: Investing.com

For me, it is worrying that the flattening is all 'front-ended'. It says we are back to Greenspan's conundrum. Then-Fed chairman Alan Greenspan mused aloud on the Fed's inability to get long-dated Treasuries to react to the Fed's rate hike train. Eventually the curve inverted and we went into ...


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