QQQ Lagged Correction Window

2020–2021

Steepening, positive curve
Liquidity + stimulus = QQQ ripped higher

2022
Flattening, then inversion

QQQ corrected hard which matched the Fed’s aggressive hiking cycle

2023–2024

Deep inversion, recovery in stocks
Despite curve being negative, QQQ rallied
That was “don’t fight the tape” (liquidity + AI boom decoupled equities from bonds)

2025

Re-steepening
Curve now climbing back toward +0.60%
Historically, this “un-inversion” phase often lines up with late-cycle stress (Fed forced to cut, growth softens)
Stocks can stay up for a while, but risk of a sharper equity correction rises when steepening = recession, not growth

A steepening curve can mean 2 very different things,

Bull steepener (2Y falling fast) = Fed cutting because growth is weakening which is bearish for QQQ medium-term
Bear steepener (10Y rising) = market pricing in inflation/deficits which hurts tech via valuation compression

Given where the Fed is in cycle, the risk leans more toward bull steepening = slowdown signal
QQQ is at highs while the curve is re-steepening from record inversion which usually sets up a lagged correction window for equities

pakoumal

I am not a licensed professional & these posts are for informational purposes only, not financial advice

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pakoumal

I am not a licensed professional & these posts are for informational purposes only, not financial advice

Also on: