US' 2-year Treasury yield climbs above 4% for first time in 15 years

Inversion between 2-year, 10-year yields interpreted by some as near-term risk of recession

By Ovunc Kutlu

ANKARA (AA) - The US' 2-year Treasury yield climbed Wednesday above 4% for the first time in 15 years, hours before a key monetary policy decision by the Federal Reserve.

The yield on the 2-year Treasury, which is more sensitive to monetary policy, was up 1.3% to 4.0164% at 12.20 p.m. EDT, marking its highest since October 2007, according to official figures.

The 10-year US Treasury yield, on the other hand, was flat at 3.573% at the time, although it climbed Tuesday to an 11-year high of 3.604%.

The inversion between the 2-year and 10-year Treasury yields, where short-term rates are above long-term ones, is interpreted by some analysts as a near-term risk of a recession in the American economy.

US Treasury Notes could be a haven for investors when they have low confidence in the markets or the Fed raises rates.

The Fed has raised its benchmark interest rate 225 points since March and it is widely expected to make another hike of 75 basis points later Wednesday.

Kaynak:

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