The 2/10 Spread Drops Below 120
by Eddy Elfenbein, Crossing Wall Street
Iāve probably become a bore on this point, but I like to keep a close eye on the spread between the 2- and 10-year Treasury bond yields. This indicator has a pretty good track record over the last few decades. When it goes negative, bad times are not long off.
Weāre still a long way from going negative, but the spread dropped below 120 basis points yesterday. Thatās among the narrowest spreads in eight years.
The spread briefly hit 119 in February of this next year before bouncing up to 177 by summer.
Copyright Ā© Eddy Elfenbein
