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On March 22, 2019, the 10-year US Treasury yield dipped below the 3-month US Treasury yield, marking the first inversion between these key rates since 2007. Concerns about yield curve inversions and their implication for economic growth have been widespread as the yield curve has flattened over the past several months. While nobody knows for certain what the future holds, it may be helpful to consider what an inverted yield curve has typically meant for equity investors over the past few decades.
Prior to the inversion on March 22nd, the spread between 10-year and 3-month US Treasury yields has gone negative (marking an inversion) on 8 separate occasions since 1978 (defining "new" inversions as those that have begun at least 3 months after the end of a prior inversion).
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