For the Panicked: A Closer Look at the Last Few Inversions (1989-2009)

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by WhenLuggageAttacks


Since some people are panicking about the 10 & 3 Treasury yield rates inverting, I thought it might be helpful to review history so people can get a sense of the time scale involved in these sorts of things.

You can follow along here:

Please note, I’m eyeballing this from the charts above. All values and dates are rough estimates.


The yields invert in late March 1989. They bounce around for the next 9 months until the end of 1989.

The S&P hit 290 in late March 1989. By October 1989, it hit 360. S&P then dipped to 320, then hit 370 by July 1990. The recession officially begins that same month. The S&P then dips to 300 and regains its value to 370 by February 1991 (roughly six months). Recession ends a month later, March 1991.


The yields invert in September. They bounce a few times over the next month.

S&P is volatile, but there is no net loss/gain. No recession.


The yields invert in April 2000. They bounce for the next 10 months until February 2001.

The S&P was at 1350 when the yields inverted. S&P hits 1520 in late August 2000 (a high it reached in March 2000, before the inversion). S&P would then begin a slow and volatile decent (four months after the initial inversion), dipping to a low of 800 by late September 2002. The recession officially began March 2001 and ended November 2001.


The yields invert in January 2006. They would bounce for 19 months, until mid August 2007.

The S&P was 1280 in January 2006 (when they first inverted). By October 2007, the S&P hit 1560 (a couple of months after the inversion ended). S&P then began a mostly slow decent down. The recession officially began a couple months later in December 2007. The S&P dipped to a low of 670 around March 2009. Recession ends June 2009.


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Disclaimer: Consult your financial professional before making any investment decision.


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