⚖️🇺🇸U.S. 2s10s Curve Steepening Stalls In February: Cable FX Macro

• The 2s10s curve un-inverted around late August 2024 and has since steepened significantly—reaching 74bps in spots by early 2026-reflecting Fed easing, softer short rates, and markets pricing in moderate growth with some term premium returning on the long end.

• However, in very recent weeks, there's been some bull-flattening chatter: longer-dated yields (like the 10-year) have fallen faster than shorter ones amid safe-haven flows, PPI surprises, geopolitical risks (e.g., Iran/Cuba headlines), and broader risk-off sentiment. This has caused temporary flattening pressure even as the overall curve remains positively sloped (normal/upward).

• As of Friday's close, traders expect two Fed rate cuts for 2026 with no moves seen before June. Market pricing clusters around 3.0–3.35%, with futures suggesting levels dipping toward ~3.1–3.2% by late 2026/early 2027 before stabilizing or slightly firming.