Treasury Yields of 2 Years & 3 Years Spike toward 5%, but 10-Year Holds at 5%, Yield Curve Bulges: Some Thoughts on What’s Brewing
The 2-year and 3-year yields indicate that the 10-year yield could go way higher over the next few months.
Source: Wolf Street
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DW NOTE
The 2-year and 3-year yields spiking toward 5% while the 10-year holds suggests the market expects the Fed to keep raising rates — and then something breaks. That's not a steepening yield curve, that's a forecast of error. The Fed just hiked into 3.4% consumer inflation with producer prices at 5.44%. If the front end is pricing more hikes and the long end isn't following, bond traders think either inflation drops sharply or the economy does.