The 10-year Treasury note yield is at 4.03 percent.
The 30-day T-bill rate is at 3.51 percent.
The Fed is expected to raise its federal funds target rate, which T-bills will track closely, by 3/4 percent by years end. The “best case” speculation by Fed watchers is that they might skip the expected September increase and only raise rates by half a percent.
So, the best case is a completely flat yield curve assuming long term rates don’t react by dropping further, as is likely. The more likely case is that the Fed will raise rates 3/4 points and we will see an inverted yield curve. The yield curve where it is today shows serious danger of recession. An inverted yield curve is a near flawless predictor of one. We’re already working our way past “soft landing.” Alan Greenspan knows that, but he has such a fetish for restraining “exuberance” at all costs, rather than simply keeping money supply properly in check to start with, that the engineering of a recession for later this year or early next appears to be a done deal.