A key recession indicator flashed its loudest warning ever after Federal Reserve Chairman Jerome Powell said benchmark rates will likely go higher than once anticipated.
The inversion between the 2-year and 10-year Treasury yields hit a record 103.5 basis points on Tuesday, according to Refinitiv data. It later narrowed to 102.4 basis points.
In normal economic times, shorter-term yields are below longer-term yields. But for months, the 2- and 10-year yields have been inverted amid growing recession fears, as the Fed continues to tighten policy to rein in inflation.