Summertime Blues! US Treasury 3m30y Curve In Bear Steepening Mode, Indicating A US Recession By Summer 2023

The US economy has a case of the summertime blues.

Bull steepenings in the yield curve are generally seen as a precursor to a recession, but they are often preceded by bear steepenings. The 3m30y curve is currently bear steepening, indicating a recession could begin as early as the summer. In fact, the 3m30y curve is now inverted at -94.628 basis points pointing to a recession in summer 2023.

This is happening as the US house payment to income ratio near all-time highs.