Latest / The Macro Memo with Fexingo: Daily Conversations on Inflation, GDP, and Federal Reserve Policy
Why the Yield Curve Is Un-Inverting and What It Means
The yield curve has been inverted for over two years, but in recent weeks it has steepened sharply, with the 10-year Treasury yield at 4.54 percent and the 2-year at 3.71 percent, a spread of 83 basis points. Lucas and Luna dig into why this matters: historically, an un-inverting curve has been a recession omen, but today the context is different. They explore how the Fed's rate cuts, sticky inflation expectations, and a still-strong labor market are combining to reshape the curve. They also connect it to the surprising rally in small-cap stocks and what it says about investor confidence…
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