Curve Watchers Anonymous has been watching the yield curve flatten for months on end.

The flattening is taking shape in an unusual manner, with yields at the long end of the curve generally declining and yields at the short end of the curve rising.

Treasury Yields 2000-2017

That chart is as of the end-of-day on September 20 following the interest rate and balance sheet reduction announcement by the FOMC.

The curve flattened again today. The above pattern is quite unusual. In most prior recessions, the curve flattened with short-end yields rising faster than long-end yields, not with the long end declining substantially for months.

I can find one similar pattern heading into the 2001 recession. It’s difficult to spot in the above chart because the curve in 2000 is inverted.

Treasury Yields 2000-2001

The flattening of the curve looks quite recessionary.

Mike “Mish” Shedlock