US Swap Spreads Widening And Curve Downward Sloping And INVERTED Beyond 20 Years

While the US Treasury yield curve has yet to invert (slope < 0), the US Dollars Swaps curve has inverted with spreads greater than 20 years going negative.

(Bloomberg) — Dollar swap spreads curve steepens as buyers of long-end Treasuries emerge, pushing 5s30s to fresh session lows; move has extended widening in long-end spreads, which initially started during early Treasuries selloff.

Hedge fund demand seen in long end of the Treasuries curve, New York-based trader says; 30-year yields topped during morning session at 3.242% but remained inside Wednesday’s high

Demand in long end has tightened 5s30s curve by ~0.6bp on the day

USD 30-year swap spreads wider by 1.1bp, reversing tightening seen in prior two sessions; spreads started to widen amid early Treasuries selloff, pointing to paying flows extending the move lower, as USZ8 bottomed at 139-24


Dollar swap spreads curve is downward sloping and INVERTED beyond 20 years.


Fed Chair Powell’s reaction?


Alarm! Core Inflation Cools To 2.2% YoY, Rent Inflation Cools To 3.3% YoY (GINI Index Keeps Rising)

Despite the predictions of rising inflation, core inflation (CPI YoY less energy and food) cooled to 2.2%.


And rent inflation cooled to 3.3% YoY.


Gold prices rose on the lower core inflation report.


Meanwhile, the GINI index of income inequality keeps on rising.


According to the Taylor Rule, The Fed still needs to raise their target rate to 7.54%.


The Federal Reserve didn’t see that coming!