Yield curve inversion reaches new extremes

4 min read . Updated: 29 Nov 2022, 07:06 PM IST Sam Goldfarb, The Wall Street Journal

The yield on the 10-year U.S. Treasury note dropped to 0.78 percentage point below that of the two-year yield, the largest negative gap since 1981. (Photo: AP) — The yield on the 10-year U.S. Treasury note dropped to 0.78 percentage point below that of the two-year yield, the largest negative gap since 1981. **(Photo: AP)**

Unusual relationship between Treasury yields reflects investors’ bets on easing inflation and future rate cuts

Yields on longer-term U.S. Treasurys have fallen further below those on short-term bonds than at any time in decades, a sign that investors think the Federal Reserve is close to winning its inflation battle regardless of the cost to economic activity.

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