Analysis: U.S. Treasuries yield curve flashes red to investors – Reuters.com

Analysis: U.S. Treasuries yield curve flashes red to investors – Reuters.com

NEW YORK, March 29 (Reuters) - The U.S. Treasury yield curve is flashing a warning sign to Wall Street, where many are worried that a recession could be in store after bond investors pushed up short-term rates to the point where yields on the two-year Treasury were actually higher than the 10-year Treasury.

Such a phenomenon, called a "yield curve inversion," is a key metric that investors watch as bond yields impact other asset prices, feed through to banks' returns and have been an indicator of how the economy will fare. Aside from signals it may flash on the economy, the shape of the yield curve has ramifications for consumers and business. read more

On Tuesday, one of the most closely watched parts of the curve, the two-year to 10-year curve , briefly inverted, after weeks of sharp moves in the U.S. Treasury market, where investors have sold off Treasuries anticipating aggressive interest rate hikes from the U.S. Federal Reserve which is fighting surging inflation.