🚨 This might be the most important chart for the US stock market. The US 2Y-10Y Treasury yield spread.
Right now, the US 10Y yield is 30 basis points higher than the US 2Y yield. Just 3 weeks ago, that gap was 50 basis points.
Historically, whenever this flipped (US 2Y higher than US 10Y), the US economy entered a period of slowdown and the stock market suffered.
Q1 2007: The US 2Y yield went higher than the US 10Y yield. After that, US stocks peaked and the economy entered a recession.
Q4 2019: The US 2Y yield went higher than the US 10Y yield. After that, the Covid crash happened and everything came to a halt.
Q2 2022: The US 2Y yield moved above the US 10Y yield again. The US economy entered a technical recession, and the S&P 500 entered a bear market.
Right now, the US 10Y yield is 30 basis points higher than the US 2Y yield. Just 3 weeks ago, that gap was 50 basis points.
Historically, whenever this flipped (US 2Y higher than US 10Y), the US economy entered a period of slowdown and the stock market suffered.
Q1 2007: The US 2Y yield went higher than the US 10Y yield. After that, US stocks peaked and the economy entered a recession.
Q4 2019: The US 2Y yield went higher than the US 10Y yield. After that, the Covid crash happened and everything came to a halt.
Q2 2022: The US 2Y yield moved above the US 10Y yield again. The US economy entered a technical recession, and the S&P 500 entered a bear market.
