the yield on the 2year treasury note is at risk of rising further above its 10year counterpart deepening an inversion of that closely followed part of the yield curve and exacerbating the debate over whether the us economy is headed for recession the differential or spread between 10 bxtmubmusd10y and 2year tmubmusd02y yields which is usually positive sank to as low as minus 10 basis points before steadying around minus 3 basis points on monday b of a securities rate strategist bruno braizinha says he and his colleagues expect the 2year10year spread to shrink to minus 50 basis points by yearend and that the extent of inversion will be driven by how much the federal reserve lifts interest rates above the socalled neutral level seen as neither accommodative nor restrictive  the risk of a more deeply inverted 2s10s curve comes as the counterpart spread between 5 tmubmusd05y and 30year rates tmubmusd30y also briefly shrunk to as little as minus 158 basis points overnight meanwhile some investors are raising doubts about whether a us economic downturn is actually on the way mark haefele chief investment officer at ubs global wealth management said “our base case remains that the us economy can avoid a recession” portfolio manager scott ruesterholz of insight investment which oversees 11 trillion in assets say the risk of a recession in 2022 is “very low” read why an inverted yield curve is a bad tool for timing the stock market “simply put market participants do not believe that the inversion is necessarily a harbinger of a recession” said marc chandler chief market strategist at bannockburn global forex however “arguing against the significance of the inversion does not mean that the us economy is not headed for a recession” he said in a note  yield curve inversions have typically preceded every recession since the 1950s according to principal global advisors albeit with a lag that could take anywhere from a matter of months to a few years there’s debate though over which measure of the curve is best to look at fed chairman jerome powell has pointed to the spread between yields in the first 18 months of the curve while others cite the gap between undefined note which has generally been steepening   bannockburn’s chandler cites commentary from former new york fed president bill dudley titled “the fed has made a us recession inevitable” which was released before the 2s10s inverted last week in it dudley said that the fed is not only behind the curve on controlling inflation but that “a hard landing” is “virtually inevitable”  the last time either the 2s10s or 5y30y spread inverted by 50 basis points or more was in 2000 and as of monday the 2s10s and 5s30s spreads were still a long way from their deepest inversions on record which took place in 1980 according to data going back to 1977 from dow jones markets data   an aggressive selloff in treasurys across the board pushed yields higher on monday with the 2year rate up at around 244 and the 10year rate hovering around 241 stockmarket investors meanwhile appeared to remain unruffled with the dow jones industrial average djia little changed on the day while the sp 500 spx rose 05