Recession signals are flashing again in the bond market as closely watched Treasury yields invert for the first time since April
- US Treasury yields inverted briefly Monday for the first time since April, flashing a closely watched warning of a coming recession.
- The 2-year US Treasury yield jumped to its highest since 2007 as forecasts of interest-rate hikes heat up.
The US bond market on Monday flashed a warning of a potential recession on the horizon as a key point of the Treasury yield curve inverted for the first time since early April.
The 2-year US Treasury yield jumped to its highest since 2007, briefly surpassing the yield on the 10-year Treasury note.
An inverted yield curve — when short-term rates exceed long-term rates — spooks investors and has historically predicted a recession on the horizon in the near to medium-term.
The Treasury yields only inverted briefly Monday, though markets have continued to reflect volatility amid tightening Fed policy and soaring inflation.
Top economist Mohamed El-Erian said US inflation could get even worse, as the Bureau of Labor Statistics released a reading of 8.6% Friday, a 41-year high.
"I think you've got to be very modest about what we know about this inflation process," El-Erian told CBS's "Face the Nation" on Sunday. "And I fear that it's still going to get worse. We may well get to 9% at this rate."
