Although a series of late summer rate cuts succeeded in un-inverting the US yield curve last year, it looks set to re-invert this year. The yield on three-month Treasury bills dipped as much as two basis points below the 10-year Treasury yield on 30 January for the first time since October. This probably reflects market anguish over advanced economy policy-makers’ ability to consistently meet their inflation targets, as well as concern over the coronavirus and its impact on the global business cycle. Convexity hedging – a technical factor in which mortgage portfolio managers compensate for lower rates by adding duration via long-term Treasuries – also played a key role in driving down the long end of the curve, as it did at the last inversion in August.