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Message
2 year vs 10 year yield inversion
Posted on 8/14/19 at 6:52 am
Posted on 8/14/19 at 6:52 am
Futures dropped this morning on news of a brief 2-10yr inversion, 30yr falling to record lows, and recession fears. IMO, the driver is the EU-US rate differential rather than US economic outlook. Nonetheless, it is a strong indicator.
Question for the board, does inversion in this instance translate in the same way in today's environment as it did in the past?
Question for the board, does inversion in this instance translate in the same way in today's environment as it did in the past?
3
Posted on 8/14/19 at 6:59 am to NC_Tigah
No because the fed purposefully is involved in buoying the economy.
Posted on 8/14/19 at 7:33 am to OleWarSkuleAlum
Fox Business is beating this to death. They have said inverted yield curve more often than CNN says racist.
Posted on 8/14/19 at 7:47 am to NC_Tigah
no, but it is a significant event. I still think we see some stagnation in growth next year. I don't know that we see a recession. Maybe if the global economy completely goes full tank. It will be equity buying season for me.
There have been a bunch of other inverted yield curves in the last 18 months but this is the first for the 10-2. I don't have access to a bloomberg or any kind of data software anymore, but i'd like to see some other spreads.
There have been a bunch of other inverted yield curves in the last 18 months but this is the first for the 10-2. I don't have access to a bloomberg or any kind of data software anymore, but i'd like to see some other spreads.
This post was edited on 8/14/19 at 7:49 am
Posted on 8/14/19 at 9:10 am to OleWarSkuleAlum
quote:Do you think that might have something to do with the legal mandate Congress passed into law requiring the Fed to strive for "full employment"??
No because the fed purposefully is involved in buoying the economy.
That's some damn fine economic analysis you got going there.....
Posted on 8/14/19 at 9:14 am to yatesdog38
As we sit:
US 1-mo= 2.018
US 3-mo= 1.974
US 6-mo= 1.922
US 1-yr= 1.795
US 2-yr= 1.579
US 3-yr= 1.521
US 5-yr= 1.489
US 7-yr= 1.542
US 10-yr= 1.60
US 30-yr= 2.055
US 1-mo= 2.018
US 3-mo= 1.974
US 6-mo= 1.922
US 1-yr= 1.795
US 2-yr= 1.579
US 3-yr= 1.521
US 5-yr= 1.489
US 7-yr= 1.542
US 10-yr= 1.60
US 30-yr= 2.055
Posted on 8/14/19 at 9:44 am to LSURussian
quote:
Do you think that might have something to do with the legal mandate Congress passed into law requiring the Fed to strive for "full employment"??
That's some damn fine economic analysis you got going there.....
stop screwing with the non-econ people man. Posted on 8/14/19 at 9:50 am to Janky
quote:Absolutely. In fact, the spread was positive by the time I posted. Nonetheless as I thought would be the case, the Financial News Channels are all over it. It's wall-to-wall "treasury market sends recession warning."
As we sit:
Posted on 8/14/19 at 10:00 am to NC_Tigah
quote:
"treasury market sends recession warning."
Ahhh, I remember that from a few months ago
Posted on 8/14/19 at 11:20 am to Broke
quote:You and I have seen this movie before more than once.
stop screwing with the non-econ people man.
What we really need is for about 5 more of these types of threads to be started and then we'll know the stock market bottom is near.
Today it wouldn't surprise me if at some point the hedge fund algos kick it triggered by S&P 500 cash price getting out of whack with the futures and we'll have a 300 to 400 point rally off of the -660 point decline that we're bouncing around right now.
This post was edited on 8/14/19 at 11:22 am
Posted on 8/14/19 at 3:37 pm to NC_Tigah
It's interesting that both Janet Yellen and Alan Greenspan opined today that they believe this time the inverted yield curve is a false indicator of a coming recession in the U.S.
CNBC
quote:
Former Federal Reserve Chairman Janet Yellen said the markets may be wrong this time in trusting the yield curve inversion as a recession indicator.
“Historically, it has been a pretty good signal of recession, and it think that’s when markets pay attention to it, but I would really urge that on this occasion it may be a less good signal,” Yellen said on Fox Business Network.
“The reason for that is there are a number of factors other than market expectations about the future path of interest rates that are pushing down long-term yields.”
When asked if the United States is headed into a recession, Yellen said “I think the answer is most likely no. I think the U.S. economy has enough strength to avoid that, but the odds have clearly risen and they’re higher than I’m frankly comfortable with,” she said.
Former Federal Reserve Chairman Alan Greenspan said Tuesday ‘there is no barrier’ to negative yields in the U.S.
“There is international arbitrage going on in the bond market that is helping drive long-term Treasury yields lower,” Greenspan said in a phone interview with Bloomberg.
“There is no barrier for U.S. Treasury yields going below zero. Zero has no meaning, beside being a certain level.”
CNBC
Posted on 8/14/19 at 3:40 pm to LSURussian
Yellen said she does not see a recession in the near future.
Posted on 8/14/19 at 3:41 pm to Janky
quote:Yeah, I know. I quoted her saying that in my post above yours.
Yellen said she does not see a recession in the near future.
Posted on 8/14/19 at 3:41 pm to LSURussian
quote:Missed that. Thanks.
It's interesting that both Janet Yellen and Alan Greenspan opined today that they believe this time the inverted yield curve is a false indicator of a coming recession in the U.S.
Posted on 8/14/19 at 3:43 pm to LSURussian
quote:
Yeah, I know. I quoted her saying that in my post above yours.
Yeah, I didn't read all that shite. I just looked at the bolded stuff.
This post was edited on 8/14/19 at 3:44 pm
Posted on 8/14/19 at 3:45 pm to Janky
I understand.
Reading are hard.
Reading are hard.
Posted on 8/14/19 at 6:28 pm to LSURussian
Alan "I guess we weren't smart enough" Greenspan 
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