What's Inverted Mean?

**mrmarket** · 08-22-2019, 08:32 AM

Originally posted by Louetta View Post

Seems to me that in listening to CNBC they interpret an inverted yield curve as being when the yield on the 2-yr is above the 10-yr, and say the curve is not now inverted because it has not CLOSED with the 2-yr above the 10.

But the treasury yield data

Interest Rate Statistics

https://www.treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=yield

NOTICE: See Developer Notice on changes to the XML data feeds.Daily Treasury PAR Yield Curve RatesThis par yield curve, which relates the par yield on a security to its time to maturity, is based on the closing market bid prices on the most recently auctioned Treasury securities in the over-the-counter market. The par yields are derived from input market prices, which are indicative quotations obtained by the Federal Reserve Bank of New York at approximately 3:30 PM each business day. For information on how the Treasury’s yield curve is derived, visit our Treasury Yield Curve Methodology page.View the Daily Treasury Par Yield Curve Rates Daily Treasury PAR Real Yield Curve RatesThe par real curve, which relates the par real yield on a Treasury Inflation Protected Security (TIPS) to its time to maturity, is based on the closing market bid prices on the most recently auctioned TIPS in the over-the-counter market. The par real yields are derived from input market prices, which are indicative quotations obtained by the Federal Reserve Bank of New York at approximately 3:30 PM each business day. Treasury began publishing this series on January 2, 2004. At that time Treasury released 1 year of historical data.View the Daily Treasury Par Real Yield Curve Rates Daily Treasury Bill RatesThese rates are indicative closing market bid quotations on the most recently auctioned Treasury Bills in the over-the-counter market as obtained by the Federal Reserve Bank of New York at approximately 3:30 PM each business day.View the Daily Treasury Bill Rates Daily Treasury Long-Term Rates and Extrapolation FactorsTreasury ceased publication of the 30-year constant maturity series on February 18, 2002 and resumed that series on February 9, 2006. To estimate a 30-year rate during that time frame, this series includes the Treasury 20-year Constant Maturity rate and an "adjustment factor," which may be added to the 20-year rate to estimate a 30-year rate during the period of time in which Treasury did not issue the 30-year bonds. Detailed information is provided with the dataView the Daily Treasury Long-Term Rates and Extrapolation Factors Daily Treasury Real Long-Term Rate AveragesBeginning on January 2, 2004, Treasury began publishing a Long-Term Real Rate Average. This series is intended for use as a proxy for long-term real rates. Treasury provides historical data back to 2000.View Daily Treasury Real Long-Term Rate Averages

shows that the rate is monotonically DEcreasing from the 1-month out thru 5 years. Then it picks up enough so the 10-yr is (barely) above the 2-yr. But it's not above the 1-yr, for example. If you draw it out on paper it sure looks inverted.

Whether or not it actually inverted....it's close enough to be inverted....which is generally not good.

**Louetta** · 08-22-2019, 09:28 AM

Look at this URL:

https://fred.stlouisfed.org/series/T10Y2Y

and click on where it says MAX in the string 1Y 5Y 10Y Max and there is an excellent display going back to like 1975 showing how recessions have followed the inversions but the inversions have lasted months. And then the spread goes quickly much higher which I really don't understand unless it's the results of Fed easings. Probably is.

What's Inverted Mean?

What's Inverted Mean?

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