Recession fears fading? US treasury yield curve steepest since November

US Treasury yield curve – the spread between the benchmark bond yield and a shorter duration bond yield – is now steepest since late November, a sign of ebbing recession fears. 

The spread between the yield on the 10-year and two-year Treasury notes currently stands at 21.3 basis points – the highest level since Nov. 29. 

The curve or the spread had flattened/narrowed to 8 basis points in December and was seen at 12 basis points a month ago. 

The curve, therefore, threatening inversion – the 10-year yield below the two-year yield – which is widely considered an advance warning of economic recession. 

The curve inversion, however, never happened and with the spread currently at the highest level since November, it seems safe to say that the US economy is out of the woods.