Research preview

The US Treasury curve has normalised for the first time in three years — and the reason matters more than the milestone. A curve that un-inverted from the long end The 2-year/10-year spread now stands at +40bp (10-year 5.29%, 2-year 4.89%). The 2022–2024 inversion — 541 trading days, reaching −108bp, the deepest since 1981 — is over. What is unusual is the mechanism. The curve did not steepen because the front end rallied on easing expectations. It steepened because the long end repriced higher: the 10-year is at 5.29%, its highest level in five years....