PGIM: US Bond Yield Curve Inversion will Further Deepen

Greg Peters, co-chief investment officer of PGIM Fixed Income, said that unless inflation falls rapidly, the inversion of the US Treasury yield curve is expected to deepen further. With high inflation and markets wrongly betting that the Fed will cut rates soon, he expects the 2-10-year yield curve to invert again by more than 100 basis points. In this regard, he explained, "The inflation rate is still quite high, and central banks, including the Fed, will not have as much room to cut interest rates as the market thinks."