Global Yield Curves Blare Louder Alarms About Economic Prospects
- Much-watched U.S. curve is the most inverted since 2007
- Rates in Germany, the U.K. and Canada suggest worry too
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Alarm bells are ringing louder by the day in bond markets around the world, signaling anxiety about economic prospects is flourishing amid ever-worsening trade tensions.
In the U.S., the 3-month bill’s yield on Friday exceeded the 10-year note’s by a margin last seen in 2007, sounding the loudest recession warning since just before the financial crisis. Germany’s 10-year rates plunged to a new record low well below zero, cutting their premium over two-year securities to the lowest level since 2015. Britain’s yield curve is around its flattest level since the global crisis more than a decade ago, and Canada’s is seeing 2007 levels of inversion.