The new bout of fretting over the health of the global economy follows a big rebound in stock markets.
“Given just how strong equities have rallied this year, it is not surprising that investors were already questioning how much further they could go,” said Kerry Craig, global market strategist at JP Morgan Asset Management.
An inverted curve has been a reliable predictor of a coming US recession for decades. But market experts advised investors against panicking for the time being.
Strategists at the Commonwealth Bank of Australia said that while the inverted yield curve is “an ominous sign,” they aren’t predicting a US recession anytime soon.
Craig said he interprets the US bond market move as a sign of slowing economic growth around the world.
“This means that we don’t expect the market to collapse, but neither do we expect equity returns to be that inspiring from here,” he added.
Trade war: Deal or no deal?
Analysts said that the outcome of trade talks between the United States and China is more significant for stocks in Asia than the shift in the US bond market.
“A couple of basis points inversion between 3-month and 10-year yields does not an impending economic Armageddon make,” Jeffrey Halley, a Singapore-based analyst at online trading platform Oanda, said in a commentary.
“A deal or no-deal” over trade between Washington and Beijing “remains the only real game in town,” he added.
Negotiations between the two governments aimed at resolving the trade war will resume this week.
Top US officials are due to hold talks with their Chinese counterparts in Beijing starting Thursday. A Chinese delegation is scheduled to go to Washington for further talks in early April.
Charles Riley and Jethro Mullen contributed to this report.
Source : CNN