The USA were sporty an inverted yield curve for some time, with longer-dated bonds yielding less than shorter-dated bonds. This reflects investors’ expectations for a decline in long-term interest rates, typical of recessions.

An analyst recently offered her her take on government bond yields and their impact on interest rates.

What happened: A deeply inverted curve shows that the federal reserve makes a mistakecalled EmilyRoland, Co-Chief Investment Strategist John Hancock investment in an interview with Bloomberg.

“That’s what’s happening here. The bond market is everywhere,” she said. She noted that the two-year Treasury yield was above 5% and then below 4%.

“The two-year Treasury yield is behaving like a meme stock,” Roland said. Meme stocks are ones that are subject to wild swings due to significant retail interest in them.

The yield on the 2-year Treasury bills has traded in a range of 3.550% to 5.084% since early March amid the banking crisis and the release of some weak economic data.

The volatility reflected significant uncertainty surrounding Fed policy, the analyst said, adding that the lack of clarity will continue.

The bond market is pricing in another hike in May and then a 325 basis point cut for the rest of the year, Roland said. However, the Fed is proposing not to cut rates before 2025, she added.

“The Fed won’t tell you they’re making a mistake, but it looks like it to us,” Roland said.

See also: The best high-yield investments to earn

Stuck in late cycle: Roland said the economy is navigating a late-cycle environment, which is the toughest part of the cycle. “The economic data is everywhere,” she said.

The US job market remains the bright spot of the economy, but cracks are beginning to show, the analyst said. The Challenger report showed a 300% year-on-year increase in layoffs in March, job vacancies…