Bond market last week: Recession risk and Fed actions

The US Treasury bond market last week was a hot spot in finance and economics as signs of economic recession within the next 12 months were too clear. These signs are shown not only through the US Treasury yield curve but also through “near-term forward spread”, the Fed's preferred indicator for economic growth situation.

As a consequence of recession risk aversion sentiment in the financial market, money flows into safer assets like bonds, MMF… making investment capital through the stock market and other financial assets even tighter.  

Are these signs strong enough to urge the Fed to start the rate cut cycle early next year? The following Macroeconomics article by Viet Hustler will analyze last week's bond market to answer this question.

Bond market with strong recession signals.

Recession signals were very clear in the bond market: