2s10s Steepeners for the New Year

By: Macro Strategy Team

December 16, 2022

By: Macro Strategy Team

Macro Strategy Team

The shape of the US yield curve is at such an extreme inverted level, any further flattening likely requires inflation to get even worse from here. We suspect the reality for inflation will turn out better and that in 2023 inflation will retreat further as the probability of a recession rises. US curve steepeners strike us as excellent risk-reward trades, even if growth is better than feared and a soft landing is achieved.

Author Bios

Macro Strategy Team

The Macro Strategy team provides cross-asset research and market intelligence across developed and emerging economies. Their expertise in FX, equities, and fixed income is complemented by proprietary indicators on investor behavior, inflation, and sentiment—turning complex data into actionable insights that help clients anticipate risks and capture opportunities.

1. Peter L. Bernstein Award for Best Article in an Institutional Investor Journal in 2013; Bernstein-Fabozzi/Jacobs-Levy Award for Outstanding Article in the Journal of Portfolio Management in 2006, 2009, 2011, 2013 (2), 2014, 2015, 2016, 2021; Graham & Dodd Scroll Award for article in the Financial Analysts Journal in 2002 and 2010. Roger F. Murray First Prize for Research Presented at the Q Group Conference in 2012, 2021, 2023. Harry M. Markowitz Award for Best Paper in the Journal of Investment Management in 2022, 2023. Doriot Award for Best Private Equity Research Paper in 2022.