Investing.com - Investors kept their eyes on the U.S. Treasury market, where last Friday the yield curve inverted for the first time in more than a decade.
Benchmark 10-year Treasury yields fell to their lowest levels since December 2017, while the spread between three-month bills and 10-year notes inverted for the first time since 2007.
The inverted yield curve is widely considered to be a leading indicator of recession.
Ten-year notes were last yielding about 2.44%, while the yield on the three-month bill stood at 2.46%.
"We went from people worried about a 4% (yield on the) 10-year and inflation, and now everyone is worried about a recession and rates going lower," said Eric Kuby, chief investment officer, North Star Investment Management Corp, Chicago.
The Federal Reserve last week flagged an expected slowdown in the economy and all but swore off on raising interest rates this year.
Rather than boost investor confidence, however, "the Fed’s ongoing actions and messaging have left markets more pessimistic than ever about the U.S. economic outlook," said Win Thin, global head of currency strategy at Brown Brothers Harriman in New York.
Interest rate futures traders are currently pricing for an approximately 65% chance of a rate cut by December, according to Investing.com's Fed Rate Monitor Tool.
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-- Reuters contributed to this report