The Treasury curve, as measured by the spread between 2- and 10-year yields, headed for its deepest inversion in more than 41 years on Thursday. The spread narrowed to as little as minus 87.2 basis points, driven by a drop in the 10-year rate while the 2-year rate held steady. It’s on pace to surpass the recent low spread of minus 84.9 basis points set on Dec. 7, according to Dow Jones Market Data. If the spread remains around current levels, the inversion would be the most negative since Oct. 2, 1981, when it reached minus 96.8 basis points. Treasury yields were mostly falling across the board on Thursday as traders weighed the prospects of disinflation in the U.S. An inverted yield curve is traditionally seen as a worrisome sign of the economic outlook.
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