by Peter Schiff, Schiff Gold:
The yield on the 10-year Treasury fell below the yield on the 2-year for the first time in 12 years, stoking recession fears and tanking stock markets.
Yield curve inversions have preceded all nine recessions since 1955. This was the first time the 10-year Treasury yield has dropped below the 2-year yield since June 2007 – the cusp of the Great Recession.
We saw other yield curves invert earlier in the year. In March, the yield on 10-year Treasurys fell below the yield on 3-year bonds for the first time since 2007, and global bond yields actually inverted last summer. At the time, the Financial Times called a yield curve inversion “Coco Chanel’s proverbial ‘little black dress’ of economic indicators.”