Three Fed Cuts on Bond-Market Radar as Curve Inversion Deepens
- Key Treasury curve measure touches level unseen since 2007
- Bonds globally are rallying amid concern about growth, trade
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Treasuries are leading a bull run in global bonds, bringing into sight the prospect of benchmark 10-year yields dropping to 2% for the first time since late 2016 as traders ramp up bets on monetary-policy easing by the U.S. central bank.
Escalating U.S.-China trade tensions and faltering global growth have seen U.S. 10-year yields tumble and the gap between 3-month and 10-year yields -- a commonly watched recession indicator -- move to levels last seen in 2007. Some market watchers, including strategists at Morgan Stanley, are now warning that the deepening inversion of the yield curve clearly presages an economic downturn.