The great U.S. Government bond yield convergence chart

U.S. 2-year, 3-year, 5-year, 7-year, 10-year, 20-year and 30-year yields are all converging. Looks like a beautiful chart, just one thing …

US government bond yields
Source: Board of Governors of the Federal Reserve System (US)

These Treasury yields have almost converged three to six months before each of the past five recessions. This isn’t a good sign, but perhaps this time it is different. Another thing – this is a sign that interest rate increase expectations are falling.

US government bond yields 2
Source: Board of Governors of the Federal Reserve System (US)
US government bond yields 3
Source: Board of Governors of the Federal Reserve System (US)

Here are yields as of August 8, 2018

2-year: 2.68%
3-year: 2.76%
5-year: 2.84%
7-year: 2.92%
10-year: 2.98%
20-year: 3.06%
30-year: 3.12%

 

Related:

Those three U.S. recession indicators – how near or far are those from being invoked?

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