原推：US demand deposits – which make up the vast majority of M2 – have been falling since last August. Now we are seeing the consequences of the yield curve inversion that began last July, which I feared last September and described in the thread below. The inversion has worsened. https://t.co/wwvVNvfVWj
The yield curve “suggests” that US monetary policy has not been this restrictive since the ‘80s. As measured by the 2-year Treasury yield relative to the 10-year Treasury yield, it has inverted by 50 basis points, the 10-year yield at 3.75% compared to the two-year at 4.25%.