Treasury yield curve continues to collapse
|The Treasury yield curve continues to hit new decade lows despite speculation that tax reform will push US economy towards inflation.
The spread or the difference between the 10-year treasury yield and the 2-year Treasury yield fell to 52.40 basis points yesterday; the lowest since Oct. 31, 2007.
The flattening of the yield curve could be associated the 10-year yield's persistent failure to hold above 2.4 percent. Meanwhile, the 2-year yield remains relatively resilient on fears that Fed may continue to hike rates next year despite waning confidence on inflation.
Still, the flattening of the curve since mid-November is somewhat surprising as the 5-year, 5-year forward inflation expectation rate has improved 1.89 to 2.03.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.