Following a 6.2 percent rally in January, the S&P 500 index fell 2.6 percent in February as the Federal Reserve raised interest rates for the eighth time since March 2022. By the end of the month, the yield on the 10-year Treasury Note increased to 3.92 percent from 3.52 percent, and crude oil prices (WTI) declined about $2 a barrel to just under $77, down from roughly $79 at the end of January.
As of February 28, 2023, the 3-month Treasury Bill yield was 4.88 percent while the 10-year Treasury yield was 3.92 percent. With short-term interest rates higher than long-term rates by 96 basis points (0.96%) – known as an inverted yield curve – the odds of an economic recession have increased materially as the “inversion” has persisted for the past 18 weeks.