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The Yield Curve Has Dis-Inverted. Are We Safe Now?

Summary:
Figure 1: 10 year-3 month constant maturity Treasury spreads (blue), 10 year-2 year (red), 5 year-3 month (green), in %. Source: Federal Reserve, Treasury.  Maybe not…Here’s the same graph with the dates: Figure 2: 10 year-3 month constant maturity Treasury spreads (blue), 10 year-2 year (red), 5 year-3 month (green), in %. Source: Federal Reserve, Treasury.  The recession began (as dated by NBER) in December 2007. What does the current situation look like? Figure 3: 10 year-3 month constant maturity Treasury spreads (blue), 10 year-2 year (red), 5 year-3 month (green), in %. Source: Federal Reserve, Treasury.

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The Yield Curve Has Dis-Inverted. Are We Safe Now?

Figure 1: 10 year-3 month constant maturity Treasury spreads (blue), 10 year-2 year (red), 5 year-3 month (green), in %. Source: Federal Reserve, Treasury. 

Maybe not…Here’s the same graph with the dates:

The Yield Curve Has Dis-Inverted. Are We Safe Now?

Figure 2: 10 year-3 month constant maturity Treasury spreads (blue), 10 year-2 year (red), 5 year-3 month (green), in %. Source: Federal Reserve, Treasury. 

The recession began (as dated by NBER) in December 2007.

What does the current situation look like?

The Yield Curve Has Dis-Inverted. Are We Safe Now?

Figure 3: 10 year-3 month constant maturity Treasury spreads (blue), 10 year-2 year (red), 5 year-3 month (green), in %. Source: Federal Reserve, Treasury. 

Menzie Chinn
He is Professor of Public Affairs and Economics at the University of Wisconsin, Madison

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