The yield curve has normalised based on data from Bloomberg. As at Sept 19, the 10-year US Treasury Yield was at 3.7% and the 2-year US Treasury Yield was at 3.5876%. On Sept 6, the 10-year US Treasury Yield which was 3.71% moved above the 2-year US Treasury Yield which was at 3.65%. This is the first time the yield curve has normalised since July 5, 2022. On July 6, 2022, the 2-year US Treasury Yield which was then at 2.82% moved above the 10-year US Treasury Yield at 2.81%.
The yield curve is important because an inverted yield curve is an indication of a recession. This time round, the economy has not - to-date - gone into a recession. The normalisation of the yield curve is indicative of normal economic conditions. As to whether a recession has been averted completely or contained, that remains to be seen.
