2-year Treasury Yields top 4.2%

After another round of interest rate hikes by the Federal Reserve, the 2-year Treasury hit a 15-year high of 4.266% earlier today.  The rate retreated a small amount since then, but clearly we are seeing some of the highest yields for government-backed securities in over a decade.

The yield on the 10-year traded earlier today at 3.829%, lower than that of the 2- year which is continued evidence of an inverted yield curve: when short term interest rates are higher than long term rates.  An inverted yield curve often indicates that a recession will occur in the next 12 months, but the strongest indicator is when the 3-month Treasury is above the 10-year, which at this point it is not.