In another worrisome sign, the yield on the 30-Year US Treasury fell to a record low Wednesday of about 2.05%.
Typically, investors expect to get paid a higher rate of return when they are lending money for a longer period of time, because the risks are higher.
“Historically speaking, the inversion of that benchmark yield curve measure means that we now must expect a recession anywhere from six-to-18 months from today,” said Tom Essaye, founder of The Sevens Report, an investment research firm, in a note to clients Wednesday.
The plunge in longer-term yields like the 30-Year are also a symptom of investor anxiety. Bond yields fall in the opposite direction of prices. In other words, they tumble when investors are buying bonds.
President Trump said Tuesday that he was delaying tariffs on certain consumer goods — such as electronics, toys and sneakers — so that US consumers would not be hurt by higher prices during the holiday shopping season.