Analyst: The US bond market suggests that the Fed is far behind the situation in interest rate cuts.

BlockBeats news, on September 10th, Nicholas Colas, co-founder of DataTrek, said that the long-term relationship between the 2-year and 10-year Treasury yields is not the only recession warning issued by the bond market last Friday. The substantial drop in the 2-year Treasury yield has also pushed the spread between short-term notes and the federal fund Intrerest Rate to the most negative level in at least 50 years. Colas pointed out that during this period, the spread between these two short-term Intrerest Rates fell below -1% only three times. In each case, a recession began within a year. However, Colas does not believe this necessarily leads to an economic recession. He said that an economic recession needs a catalyst to start, and so far, the United States has not experienced anything that could trigger such a severe economic slowdown. Instead, this inversion indicates that bond traders are increasingly concerned that the Fed is not dropping borrowing costs promptly in the face of labor market slowdown. Colas said in a report on Monday: 'The bond market is saying that the Fed is far behind the curve in cutting interest rates.' (Jinshi)