Yield curve inverts as US-China trade war intensifies

Friday, 23. August 2019 19:35

The yield on the two-year Treasury topped the 10-year note yield once again on Friday, intensifying recession fears, after United States President Donald Trump referred to his Chinese counterpart Xi Jinping and Federal Reserve Chair Jerome Powell as enemies and ordered American companies to "immediately start looking for an alternative to China." Trump's remarks came after Beijing announced retaliatory tariffs on $75 billion worth of American products.

The yield curve inversion, which is seen as a reliable recession indicator, occurred for the fourth time since last Wednesday. Prior to last week, the main part of the yield curve last inverted in 2007.

The US two-year note yield declined by 0.097 basis points to reach 1.511% at 1:42 pm ET while the yield on the 10-year Treasury fell by 0.1 basis points to hit 1.51% at the same time. The 30-year Treasury yield was down by 0.095 basis points to 2.008% at 1:46 pm ET.

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