According to PANews, Forexlive analyst Adam Button has highlighted that since 1955, the inversion of the yield curve has been a reliable predictor of U.S. economic recessions. However, Button emphasizes that the true indicator of an impending recession is not the inversion itself but when the curve returns to normal. He likens this to a storm forecast, where inversion signifies storm formation, and the end of inversion indicates the storm's landfall, particularly during a bull steepening phase led by the front end of the curve. While recession data may not be immediately visible, market contraction is evident. In addition to the curve's slope, the two-year U.S. Treasury yield has dropped by 20 basis points, nominally 170 basis points lower than the Federal Reserve's fund rate, a situation unlikely to occur without significant economic issues.

Previously, it was reported that the U.S. two-year Treasury yield fell below the ten-year Treasury yield for the first time since July 2022, ending the inversion.