US Treasuries (UST) Market
US bond market started off the week on the wrong foot as 2-year benchmark UST yielded higher than its 5-year counterpart on Tuesday.
The phenomenon of yields of shorter-period bonds higher than longer period ones is known as a yield curve inversion which has a good track record of indicating recession. The inverted yield curve indicates investors are worried about the long-term growth of the economy.
Meanwhile, the aggressive comments from the Fed chairman Jerome Powell cited the labour market is still going strong with “strong job creation” and “gradually rising wages” ahead of November’s employment data.
As at yesterday, the 2-, 5-, and 10-year benchmark UST yields stood at 2.76%, 2.75% and 2.89%, respectively.