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And context changes everything. Go to Bloomberg.com to get context. Welcome to the Bloomberg surveillance podcast. I'm Tom Keene.

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Let's bring in Greg Daco, shall we? Oxford Economics Chief U.S. Economist.

He joins us in the studio in our interactive broker studios.

Greg, great to catch up with you.

Let's just talk about a shape of that yield curve.

What's the signal that comes from that for you right now?

Well, I think what we're seeing is that the expectations for growth in the US

are of more moderate growth going forward.

And the 10-year yield is reflecting both those expectations

of more moderate growth as well as more moderate inflation

going forward.

And with the Fed and out on hold, we believe the Fed has actually reached its terminal policy rate for this cycle,

we don't really see much momentum upward for yields going forward.

So I think we're going to see this flatter curve for the foreseeable future.

There's always that question of does that signal recession?

I think there's a possibility that that signals a recession.

We actually think there won't be a recession, but we're seeing more and more signals, including from policy makers, that the risks are really to the downside.

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