7s/10s Curve Is Inverted

Recession likely to come sooner than most think:

Of course, this shouldn't come as a surprise given what we wrote previously that the US government has been running a budget surplus in 2022. Indeed, this is the first time since April 2019 that the government ran a budget surplus:

And what happened in the months that followed that budget surplus? The yield curve inverted, and Google searches for "recession" hit their all-time highs:

And while HY spreads are unchanged from a year ago, they have been creeping up so far in 2022:

These are all ominous signs of an imminent recession and/or risk-off event. Prepare accordingly...