Reuters came out with downbeat signals from the Federal Reserve’s (Fed) research amid the ongoing recession chatters as Asian markets cheer the Good Friday holiday.

“The Federal Reserve’s preferred bond market signal of an upcoming recession has plunged to fresh lows, bolstering the case for those who believe the central bank will soon need to cut rates to revive economic activity,” said the news.

Reuters also adds that research from the Fed has argued that the “near-term forward spread” comparing the forward rate on Treasury bills 18 months from now with the current yield on a three-month Treasury bill was the most reliable bond market signal of an imminent economic contraction.

Additional quotes

That spread, which has been in negative territory since November, plunged to new lows this week, standing at nearly minus 170 basis points on Thursday.

Money market investors, however, on Thursday were largely betting the Fed would have cut rates by about 70 basis points by December, from the current 4.75%-5% range.

‘Powell’s curve ... continues to plunge to fresh century lows,’ Citi rates strategists William O’Donnell and Edward Acton said in a note on Thursday. Refinitiv data showed the curve was the most inverted since at least 2007.