For the first time since 2005, the 2-Year/10-Year yield curve inverted in the US bond market. An inverted yield curve means that the yield on 10-Year Treasuries trade below the yield of 2-Year Treasuries, suggesting that bond traders don’t see a bright future ahead. The yield moves opposite of the price, so as yields drop the price increases. The majority of analysts and economists view and inverted yield curve as a messenger for a recession. The last five times this inversion occurred, the US economy entered a recession. While some may debate if yield curves can predict anything at all, it is a clear sign that the global economic picture is darkening.

In March of this year, the first sign of stress in the pipeline flashed when the 3-Month Yield eclipsed the 10-Year Yield. The inversion remained intact for the most time since then. The 30-Year Yield dipped below 2.00% for the first time in its existence and negative yielding debt now totals over $16 trillion globally. Usually, a recession follows the inversion anywhere between six months and two years. There is a minority which argues that this time is different, but data doesn’t support their argument.