Part of US Treasury yield inverts for first time this year

Feb 26 (Reuters) - A part of the U.S. Treasury yield curve that is watched by some analysts as a possible recession indicator inverted for the first time since mid-December on Wednesday as concerns about U.S. economic growth and a more optimistic picture on longer-term debt issuance plans pull longer-dated yields lower.

The spread between yields on two-year and five-year U.S. Treasuries briefly traded negative and was last at 0.40 basis points. US2US5=TWEB

When this part of the curve is inverted it means that five-year notes offer lower yields than two-year ones. Typically, investors demand higher returns for longer-dated debt.

Two-year yields have remained relatively elevated compared to other maturities due to expectations that the Federal Reserve will keep interest rates steady until at least mid-2025.

If the inversion in two-year and five-year yields deepens it may indicate fears that the U.S. central bank is behind the curve in cutting rates if economic data continues to worsen.