Woofun AI reports that Capital Economics anticipates the spread between 10-year and 2-year U.S. Treasury yields will narrow further in the coming months. The firm suggests that escalating tensions in the Strait of Hormuz may trigger a complete inversion of the yield curve. This potential inversion stems from expectations that short-term real interest rates will rise more sharply than long-term rates, driven by a projected Federal Reserve rate increase of 75 basis points over the next year.