Yield Curve Inversion (10Y-2Y)
A phenomenon where the 10-year Treasury yield falls below the 2-year yield. Historically a leading indicator of recession.
Market Impact
RISING / BULLISH
(Steepening) Expectations of economic recovery, or reflation. Positive for financial stocks.
FALLING / BEARISH
(Flattening/Deepening Inversion) Sign of recession. Medium to long-term risk-off.
Context 2026
After resolving a long-standing inversion (steepening), 2026 stands at a crossroads: has the economy returned to cruising speed, or is it falling into stagflation?
OmniMetric Relevance
Medium. Due to structural changes in bond supply/demand, its predictive accuracy has waned, so it's evaluated in combination with other indicators.