Treasury Yield Curve Inversion Alert

From Bloomberg we see:

GB12:GOV12 Month0.00 4.23GT2:GOV2 Year4.38 100.72GT5:GOV5 Year4.00 101.40GT10:GOV10 Year3.88 100.56GT30:GOV30 Year4.25 103.27

Yields are falling over the next 10 years.  This usually warns that smart money (or at least big money , which is usually the same thing) is expecting recession is here or coming.   This is doubtless no surprise to most of you.  The hangover after the Inflation Reduction Act party is arriving.  It was not much of a party for me, but connected billionaires doubtless had lots of fun wearing lampshades. 

Falling interest rates mean you should be taking out ARMs for house loans, not fixed rate. Buying bonds now or buying CDs means likely better returns than you will get in three years.  Falling interest rates will also mean that fund managers who are obligated to get some decent return for pension funds and annuities will be buying equities not bonds.

If you are risk averse, municipal bonds of states run by adults (like Idaho) are probably a good purchase.  I see a number of trades yesterday of Idaho munis with 4% and up yields.  Remember that the interest on most municipal bonds is exempt from federal income tax and if you are a resident of that state, exempt from your state's income tax