The 10y/3m inversion came after the FED hiked
the federal funds rate by three-quarters of a percentage point on July 27th in an effort to combat inflation
, which currently stands at 9.06%. Inflation rose after the M2 Money supply
increased by over 40% in 2020 and 2021, which was driven by government spending to stimulate the economy during the COVID-19 recession.
With the latest CPI print, the real interest rate
stands at -6.04%. The real yield for a 10-year Treasury bond fell along with nominal yields, which was supportive for Gold prices
. Gold outperformed Silver, leading the he Gold/Silver Ratio
higher, which rose along with the US Dollar Index.