The 2025 versus 2022 curve of the Dec Eurodollar futures shows that yield curve inversion has occurred since March 2021. Usually an ominous sign and one ignored by financial media. The market seems to ignore the FEDs expectations of tapering the balance sheet and rate increases. A powerful signal. One could trade it by shorting the 2022 and going long the 2025. But, interesting to see. Note the head and shoulders reversal pattern. Rates went higher at the long end for a time, but now things are going the other direction (lower 30 year, higher 5 year). The trade appears to be long duration bonds at this point. BULLISH the long bond.
Comment:
The breakout has occurred. And I believe it has room to run for the next year or two