Treasury curve inverts further below zero after Fed’s Bullard produces 5%-7% estimates for fed-funds rate

The spread between 2-
TMUBMUSD02Y,
4.462%
and 10-year Treasury yields
TMUBMUSD10Y,
3.776%
inverted more deeply on Thursday, shrinking to as little as minus 70.5 basis points, after a Federal Reserve policy maker released estimates of how high he thinks interest rates might need to go. After St. Louis Fed President James Bullard put the range at between 5% to 7%, the 2s10s spread went further below zero and remains on track for its deepest inversion in more than 40 years. The last time the spread has fallen this far below zero was in February 1982, a month after then-Fed Chairman Paul Volcker pushed the fed funds rate to 15%. Investors pay attention to bond-market inversions because they are seen as reliable indicators of approaching recessions.