00:00The bond market is sounding a warning signal on the U.S. economy.
00:04The gap between the two-year and the ten-year Treasury yields
00:07has narrowed to the smallest margin since early 2025,
00:11bringing the yield curve on the brink of inversion.
00:15Historically, an inverted curve where short-term yields surpassed long-term ones
00:20has preceded every U.S. recession since the 1960s.
00:24The flattening reflects growing investors' concerns
00:27that the Federal Reserve's rate hikes aimed at curb inflation
00:31could ultimately start economic growth.
00:34The pressure is already ripping through the financial sector,
00:38hitting bank stocks as narrowing yield spreads squeeze lending margins.
00:42However, opinion remains divided.
00:45Some analysts caution against reading too much into the signal.
00:49They cite strong consumer spending and ongoing corporate investment
00:53as proof that the U.S. economy remains resilient enough
00:57to absorb further rate increases without tipping into a downturn.
