The persistent flattening of the Treasury yield curve appears to still have legs, and that may be a sign of economic trouble ahead.

As Bloomberg details, on Wednesday, the minutes of the Federal Reserve’s September meeting revealed policy makers’ resolve to stick to their tightening path.

The yield curve’s reaction to that un-data-dependent hawkishness is very evident… (worsened by today’s strong 30Y auction)

The difference between five- and 30-year yields fell below 92 basis points, near the lowest since the start of the last recession.

Policy Error?

Five-year Treasury notes are among the most sensitive to Fed policy.

Who needs an inverted curve for a recession after all?

Furthermore, banks don’t seem to need a steeper curve either…