MC Explains: What is yield inversion on bonds, and what does it mean for the economy?
On March 8, the yield on o ne-year government bonds rose higher than that of the 10-year note, following higher-than-expected cut-offs for the 364-day Treasury Bill sale, thus briefly inverting the yield curve for the first time since 2015.
The one-year bond yield, which trades around the 364-day Treasury Bill yield, briefly rose to 7.48 percent earlier in the day. The 10-year benchmark 7.26 percent, 2032 bond yield was also at 7.48 percent. The Reserve Bank of India (RBI) sold the 364-day notes at 7.48 percent yield, the highest since October 2018.
According to data from Refinitiv, a global financial data provider, the one-year note last traded above the 10-year bond eight years back -- in May 2015.