The Yield Curve is Now in the Deepest Inversion Since 1981

By Ryan McMaken

How big is big when it comes to the latest inversion? To measure the magnitude of the inversion, a time series of the gap between the yields on a long-term and a short-term is calculated. The most common-used measure of this is the gap between the 10-year Treasury and the 3-month Treasury.  If we graph this difference between the 10-year and the 3-month, we can see that we’re now experiencing the largest inversion in more than 40 years.