US bonds: US bonds two-year yield falls below 10-year yield for the first time since July 2022

That’s a key milestone for the Treasury market, where short-term yields have been higher than longer-term ones — creating an inverted yield curve — for most of the time since the Fed began a series of 11 interest-rate increases totaling more than five percentage points in March 2022.

The move comes as investors bet the Fed and fellow central banks will turn more aggressive in cutting interest rates amid mounting concern that economic growth is faltering at a faster pace than expected just weeks ago. That has triggered one of the most powerful bond-market rallies since fears of a banking crisis flared in March 2023.

The disinversion of the yield curve may mean the US economy has entered a recession, said James Athey, a portfolio…