The 2-10 year spread has not been positive since July 2022. The most recent high close (most narrow negative spread) is coming near -16 basis point. Today the spread rose to -27.3 basis point which would be its highest close since January 29.

Since June 25, the spread has moved from -50 basis points to the current -27.3 basis points. It’s still negative, but the hope that the Fed will ease rates – and maybe more than expectations – is helping the move.

Another dynamic may be that if former Pres. Trump is elected president, it could lead to higher inflation on the back of increased tariffs (trade war) and higher deficits (ironically). After the presidential debate where Biden was beaten soundly, the flow of funds was in the steepening favor.