5-year and 30-year Treasury yields invert for the first time since 2006

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5-year and 30-year Treasury yields invert for the first time since 2006, fueling recession fears

CNBC

U.S. 5-year and 30-year Treasury yields on Monday inverted for the first time since 2006, raising fears of a possible recession.

The yield on the 5-year Treasury note rose to 2.56%, while the 30-year yield fell to 2.55%. This is the first time the shorter-dated 5-year Treasury yield has risen above that of the longer-dated 30-year U.S. government bond since 2006 — just a couple of years before the Global Financial Crisis.

At its high of the session, the 5-year yield hit a high of 2.67%.

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Historically, the yield curve has inverted prior to recessions indicating their concern about the health of the economy.

“With the Fed set to hike into restrictive territory, the curve will invert,” said Seth Carpenter, chief global economist at Morgan Stanley. “As has always been the case in the past, markets will debate whether an inversion presages a recession. A policy mistake that causes a recession is clearly possible, but our baseline is that an inversion without a recession is more likely.”

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