A widely watched section of the U.S. Treasury yield curve on Monday hit its deepest inversion since the high inflation era of Fed Chairman Paul Volcker, in a signal that financial markets see the current Fed tightening cycle eventually tipping the U.S. into recession.

The spread between the 2-year and 10-year U.S. Treasury note yields hit the widest since 1981 at -110.80 basis points in early trade, a deeper inversion than in March during the U.S. regional banking crisis. The gap was last at -108.30 bp.

(Reporting by Alden Bentley; editing by Philippa Fletcher)