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Every yield curve "situation" has a series of people explaining why the yield curve doesn't matter this time, or arguing over which specific yield curve to care about.

See thread and charts below.
The 10 year - 2 year yield curve currently has historic negative divergence from the 10 year - 3 month yield curve.

The 10-3 curve has a slightly better track record and is the original academic study. Meanwhile, the 10-2 curve is more market-oriented. So, a point in both camps.
In plain English, the 10-3 curve is saying "no recession in clear sight" while the 10-2 curve is saying, "we're probably getting close to a possible recession, but not confirmed, and probably many months away, but asset prices start to top around here."
Meanwhile, due to multi-decade high inflation along with various measures of financial repression and a literal war occurring along with acute commodity challenges that are not yet fully understood, either yield curve could be significantly off.
Back in 1994, the curves diverged significantly too (and that was the start of a Fed hiking cycle, but not a recession).

The 10-2 led in that instance, and the 10-3 curve followed as the Fed hiked rates. But there was no inversion; a Pyrrhic victory at best for the 10-2.
Frankly I think the biggest takeaway is to know what you own. Traders don't like this, but investors do.

The market is over-financialized here, but at the end of the day, it depends on whether your assets are producing cashflow at appropriate valuations or not, and when.
For commodities, it depends on whether that commodity is inherently undersupplied or not, and over what timeframe.

And if it's a monetary commodity like gold or bitcoin, it depends on how it structurally compares to its competitors like cash deposits and government bonds.
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Raoul Pal @RaoulPal ยท Mar 22, 2022
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Great thread!