Thread by @RaoulGMI

There is something interesting about this rate cycle in the yield curve.... Normally, it doesn't really flatten until a couple of years post recession and normally at 250bps. Now, this could be a correction but if it breaks this line, it suggests a shorter cycle than normal.

This doesn't mean an recession is imminent but it means that the bond market sees less ability to tighten without slowing growth. We saw similar in Japan's YC in 2010 (lower than the usual 150bps)...

And Japan's bond yields never recovered...

No action points right now, but just observing. If the YC in US flattens, breaking the line, it suggests that rates cant rise much and that will shift equity market structure back to long-duration growth as GDP growth is less likely to be supportive of cyclicals.

Watching...