2s 10s inversion now a massive 75 bps, the most since 1981. Largest of this cycle and expanding sharply and regularly.
that's kind of shocking.
Any of these could be true:
Fed is fighting inflation way too hard and the short term fed funds rate should be far lower
1H23 will have a very sharp drop in GDP growth so long term rates are correct to be low and dropping.
the bond market is just all off and not working well. It completely didn't see the 2022 inflation coming, so this option is actually not out of bounds.
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the scary part is that recessions generally start *after* the curve inversion heals itself. So you think the problem is over...but it's just beginning.
but who knows...the post-pandemic period has had a ton of 'firsts.' Maybe it's different this time because of the pandemic and past results won't repeat.