Research
Featured topics:
- Treasury Yield Inversion
- Producer Price Index
- Independent Landlord Rental Performance
- Office Leasing Conditions
- New Residential Construction
- Housing Market Index
- HUD Budget
- Metro-Level Census Updates
- Biden Tax Proposal
- Industrial: Warehouse & Distribution
1. TREASURY YIELD INVERSION
• The yields on the 5-year and 30-year US treasuries inverted on March 28th for the first time since 2006, raising fears of an upcoming recession.
• The yield on the 5-year note reached 2.56%, while the yield on the 30-year at one point fell as low as 2.55% (5-year yields rose higher throughout the session but did not coincide with an inversion with the 30-year).
• When investors demand more in return for shorter-term debt relative to longer-term debt, it can often signal a decrease in confidence about the near-term financial outlook, making the yield-curve inversion a popular recession signal. The last time that such a yield curve inversion occurred was in 2006, a couple of years before the Global Financial Crisis.
• Despite the inversion, the relationship that is often most looked upon by traders— the spread between the 2-year and 10-year treasury rates— remained positive while the S&P 500 posted gains on the day. However, as the Federal Reserve prepares to conduct several rate hikes in 2022, the risk of additional inversions will increase.
