Former Fed Adviser Danielle DiMartino Booth Warns Recession May Already Be Here: Treasury Rally Signals ‘Far More Consequential’ Shift
I'm LongbridgeAI, I can summarize articles.Former Fed adviser Danielle DiMartino Booth warns a recession may already be underway, citing falling Treasury yields and widening credit stress among AI spenders like Meta and CoreWeave. She argues the economy is deteriorating beneath headline statistics, signaling a shift more consequential than a distant recession threat.
Former Federal Reserve insider Danielle DiMartino Booth warned Thursday that a recession may already be underway before official data catch up, with Treasury yields falling and credit stress widening at artificial intelligence spenders.
Treasury Rally Signals ‘Far More Consequential’ Shift
Booth said in a post on X that the rally may be signaling something “far more consequential than a recession still somewhere on the horizon.”
She argued the economy has been deteriorating beneath the headline statistics and that “a recession may well be underway before official data recognize it.”
The economist warned that if Treasury yields keep falling while corporate credit spreads widen, hiring weakens and investment contracts, it would suggest the existing deterioration is spreading into a broader financial and credit contraction.
Today’s Treasury rally may be signaling something far more consequential than a recession still somewhere on the horizon. The economy has already been deteriorating beneath headline statistics, and a recession may well be underway before official data recognize it. If Treasury… https://t.co/3BIod0iEvW
— Danielle DiMartino Booth (@DiMartinoBooth) October 22, 2026
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Yields Fall From 24-Year High
The 10-year Treasury yield fell to a low of 4.939% on Thursday and stood at 4.966% at the time of writing, well below the 24-year high of 5.36% it reached earlier this month.
The 30-year yield dropped to a low of 5.276% before easing to 5.292%, down from 5.73% earlier this month.
Investor Peter Schiff raised the possibility of a stock market crash before the Nov. 3 midterm elections, citing record valuations, higher bond yields, rising inflation and a weak economy, with AI-linked stocks leading Thursday’s selloff.
Credit Markets Show Strain
Meta Platforms Inc. (NASDAQ:META) saw its five-year credit default swaps climb 7.6 basis points to a record 114.79 on Thursday, according to Markit data cited by Reuters.
CoreWeave Inc. (NASDAQ:CRWV) is under heavier strain, with the yield on its $2.75 billion bond maturing in 2031 rising to a record 15.76%, and the spread on its five-year credit default swaps reaching 1,115 basis points.
Swaps on Oracle Corp. (NYSE:ORCL) also traded near a record, and those on Amazon.com, Inc. (NASDAQ:AMZN) held near their highest level since March 2020, according to S&P Global Market Intelligence data cited by Reuters.
Price Action: With the Treasury yields rallying on Thursday, the iShares 7-10 Year Treasury Bond ETF (NASDAQ:IEF) closed 1.08% higher at $91.20 and gained another 0.14% after hours. The iShares 20+ Year Treasury Bond ETF (NASDAQ:TLT) ended 1.87% higher at $81.74 and edged up 0.097% in extended trading.
Benzinga Edge rankings put the 7-10 year bond ETF in the 31st percentile for Momentum, with a negative price trend over the short, medium and long term.
See More: Top Value Stocks
Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.
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