Deeply Inverted Bond Market Gauge Signals Impending Economic Slowdown and Recession

The spread between 10-year and 3-month Treasury yields, the most deeply inverted part of the US yield curve, is pointing to the likelihood of a "deep recession," according to Campbell Harvey, the Duke University professor who pioneered the use of the spread as an indicator of future economic growth. The 10-year/3-month spread is further below zero than it was in the run-up to the 2007-2008 financial crisis and in the late 1980s, when the Federal Reserve pushed interest rates back above 8% to 9%.