Yield Curve Flattening Flags 31% Recession Odds, Markets Price Steeper Fed Path
IXIC sits 30% above its 52-week low of $20,690.249.
Summary
The 10y-2y Treasury spread has compressed to 40 bps, well below its 50-year average of 85 bps, implying a 31% chance of recession within 24 months based on September's average spread. That's up from 12% at the long-run average spread. The curve gave a false signal in 2022-24, but the economist warns markets are pricing three rate hikes by end-2027 versus the Fed's one, which could tighten financial conditions too early. She expects one more hike in 2026 then a hold through 2027. This macro signal directly impacts the Nasdaq's rate-sensitive tech-heavy composition.
At the time of this announcement, IXIC was trading at $26,813.18 on NASDAQ in the Finance sector. The 52-week trading range was $20,690.25 to $27,288.79. This news item was assessed with negative market sentiment and an importance score of 7 out of 10. Source: Reuters.