Treasury Rally Compresses Curve to Flattest Since 2007: Chart

(Bloomberg) -- Investors have been flocking to 10-year Treasuries, driving the yield on the benchmark note down even as shorter-term rates -- which are more closely tied to the Federal Reserve’s rising policy benchmark -- hold near multi-year highs. As the 10-year yield fell below 2.75 percent Wednesday, its spread over the two-year narrowed to around 48 basis points, a level not seen since 2007. An account of the Federal Open Market Committee’s Jan. 30-31 meeting, the most recent for which minutes are available, showed that some policy makers thought it important “to monitor the effects of policy firming on the slope of the yield curve,” noting the strong association between curve inversions and recessions.

©2018 Bloomberg L.P.