(Reuters) – U.S. Treasury yields tumbled to one-year lows on Monday and a closely watched part of the yield curve turned positive for the first time in two years, as concerns grew that the U.S. economy is heading into a downturn.
The an inversion in the yield curve typically indicates that a recession is likely in the next one-to-two years, though this inversion has lasted longer than in previous episodes.
The curve then usually turns positive before a downturn begins.
Yields on interest rate sensitive two-year notes fell 19.4 basis points to 3.6784%, the lowest since May 2023. Benchmark 10-year note yields dropped 11.2 basis points to 3.684%, the lowest since June 2023.
The gap between two- and 10-year Treasury notes was last at 0.4 basis points, turning positive for the first time since July 2022.
(Reporting By Karen Brettell)
