The Bond Market Is Sending a Contradictory Signal on Growth

Episode 54 of The Macro Memo tackles a surprising disconnect in the bond market: the yield curve has been steepening sharply this spring, but the steepening is happening for the wrong reasons. Lucas and Luna dissect the divergence between the two-year yield, which is actually falling amid rate-cut expectations, and the ten-year yield, which is climbing on supply fears and term premium repricing. They walk through the specific numbers from the June 15 market data—the two-year at 3.62 percent, the ten-year at 4.49 percent, the thirty-year pushing toward 5 percent—and explain why this pattern has historically preceded economic slowdowns, not accelerations. The episode also explores how the ECB's first rate hike since 2023 and the surge in wholesale energy costs are feeding into this dynamic, and what it means for the Fed's next move. A focused, data-driven conversation for anyone trying to read the bond market's real message about growth and inflation in mid-2026. #YieldCurve #BondMarket #FederalReserve #InterestRates #Inflation #TermPremium #TwoYearYield #TenYearYield #SteepeningCurve #ECB #WholesaleInflation #EnergyShock #EconomicGrowth #RecessionSignal #MacroMemo #FexingoBusiness #BusinessPodcast #Economics Keep every episode free: buymeacoffee.com/fexingo