The overnight US10Y-2Y spread narrowed sharply to -16BP. This is a maximum value of -108 BP since it was inverted in June last year, and has now shrunk to -16BP; the period of this round of inversion narrowing has been reduced from July 3 to now, with the two FOMC meetings suspended between June 14 and September 21. Although the pace of interest rate increases has slowed down, as the benchmark interest rate has soared, various term interest rates have risen rapidly since July, and the upward rate is greater than when interest rates were raised by two yards and three yards last year. Of course, this is related to the “three factors” of US debt. The long-term end rose rapidly in this round, and term premiums contributed to the vast majority of the increase.
However, the current 10-2 narrowing. The most intuitive performance on the market is due to 10Y and 2Y rising at the same time and 2Y increasing less than 10Y; it is not a sharp decline in 2Y; it is not a sharp decline in 2Y; this narrowing in yield is the exact opposite of the SVB incident in mid-March. It is worth noting. I think the reasons are as follows:
1) Judging from the recent shouts of most FED officials, “dovish” is obvious, and Fedwatch has been priced at the beginning of the 11th in recent weeks. The FOMC meeting in mid-December was “on hold”. 5.5% is likely to be the terminal rate. The overnight Powell speech market experienced increased short-term turmoil. US10Y was one step away from the 5% mark, and the three major stock indexes closed down at the end of the session; there is no clear attitude about monetary policy continuing to “play tai chi”, but I am deeply impressed by the sentence “economic slowdown is needed to overcome it...