![]() ![]() This 0.74% difference makes the yield curve the most inverted in nearly 40 years. Since then, the 2-year Treasury yield has surged further as the Fed has raised its benchmark interest rate.Īs of November 25, the 2-year Treasury yields 0.74% more than the 10-year Treasury. In July, the yield on the 2-year Treasury note rose above that on the 10-year Treasury security, inverting the yield curve. The Treasury yield curve has inverted, as is often the case before recessions. Investors are increasingly concerned that the Fed’s approach to taming inflation with steep interest rate increases will lead to a recession. Market participants expect the Fed to raise the federal funds rate by 0.5% to the 4.25-4.50% range when the central bank’s interest rate policy committee meets on December 13 and 14. The target level for the federal funds rate is now 3.75-4.00%. The central bank has raised the federal funds rate in 0.75% increments four times since June, following increases of 0.25%, 0.5%, and 0.75% in March, May, and June. The Federal Reserve is trying to catch up after being slow to recognize inflation. ![]() The relentless rise in inflation has roiled stocks and bonds in 2022. The iShares 20+ Year Treasury Bond ETF (TLT) is down twice as much, or 29.3%.Ĭommodity-oriented sectors such as energy are among the few investments that have worked this year.įor example, the Vanguard Energy ETF (VDE) is up 70.9%. Long-term Treasury bonds, which often bucked the decline in stocks during the past decade, have fared worse. The S&P 500 (SPY) is down 14.3% for the year after being down as much as 24.0%. To say 2022 has been a tough year for investors would be an understatement. Second, some of them provide meaty dividends as well. First, all of them have strong near-term growth prospects. If you are looking for the best growth stocks to buy now, this list of stodgy stalwarts from top sectors is worth checking.
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