Recession is looming, inverted yield curve signals

U.S. yield curve inverts for first time since 2007, recession fears mount

U.S. yield curve inverts for first time since 2007, recession fears mount

The Fed's announcement inverted United States treasury yields with the spread between yields of three-month treasury bills exceeding those of 10-year notes.

U.S. Treasury yield curves inverted in 2000, 1989 and frequently between 1978 and 1982-all shortly before the start of recessions.

The fall in the 10-year also weighed on the spread between 2- and 10-year yields, another significant measure of the yield curve. Factory activity across the whole euro zone looked equally dismal.

They are considered the world's safest securities because they are backed by the full faith and credit of the US government.

"Given the "soft patch" the global economy is going through, Roache acknowledged that 'it makes sense for the Fed to pause to watch the data to see how things evolve.' Still, he said he felt that concerns about global growth were 'a little bit overdone'". She added that "the Fed decision this week has created an environment for risk-taking. I don't think this is a cause for panic", she added.

On Wednesday, the Federal Reserve lowered its own forecast of economic growth, to just over 2 percent for the year and signaled that it was unlikely to raise interest rates in 2019. "That would be a very activist Fed, which may stave off a recession", Hooper said.

The index shed 1.8%, while the S&P 500 closed down 1.9%.

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Preliminary measures of USA manufacturing and services activity for March showed both sectors grew at a slower pace than in February, according to data from IHS Markit. Accordingly, the yield on the 10-year Treasury has sunk to 2.43 per cent from more than 3.20 per cent late last year.

"This is a powerful move".

"Are there willing buyers there, are there guys that really need to buy to get into the market, or are we a little overextended here in Treasuries?"

A pile of one dollar coins honoring former U.S. President Thomas Jefferson are seen at the unveiling by the U.S. Mint in Washington, August 15, 2007. "The two maturities were last below that level in September 2007, a run of 3,009 trading days".

After plunging toward US$1.30 on Thursday, Sterling recovered a little after European Union leaders gave Prime Minister Theresa May a two-week reprieve, until April 12, to decide how to leave the European Union.

The Markit Purchasing Managers' Index report, which tracks activity in the US manufacturing sector, on Friday disappointed investors, with the headline index down 0.5 per cent to 52.5 versus the expected 53.6. -China trade talks and as the grim manufacturing data reignited fears of a slowdown in the global economy and oil demand.

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