The U.S. Treasury yield curve—the spread between long- and short-term rates—has flattened this year, raising concerns about the investment implications. Read more...
The Treasury yield curve tends to flatten as economic expansions age, and it has become inverted before each of the last nine recessions dating back to 1955.
However, in the last five such instances, the S&P 500 has delivered positive returns three times over the 12 months following curve flattening.
As of the end of September of this year, the yield was not yet flat, but it could be by next March if the Fed maintains its tightening pace and the 10-year Treasury rate continues above the 3.0% level.