Uh Oh! Yield Curve Is Flattening

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by Chris
The signs coming out fo the US Treasury market have been less than encouraging for the stock bull case.
In fact, the combination of rising interest rates and a falling dollar is possibly a sign that a major player(s) is walking away from US assets (by selling Treasuries and then selling the resulting dollars too).  This is something I discuss at length in my weekly Off The Cuff podcast for enrolled members.
At any rate, the other feature of Treasuries that’s concerning is the flattening yield curve.  These have quite reliably signaled recession in the past.  Today?  Who knows?  The signal may well be busted due to all the central bank interventions and distortions.
But, flattening it is, with today being a textbook perfect example of that.  Here we see the short end going higher in yield even as the long end falls in yield:

Stocks started to sell off, well, weakened to flat on the S&P 500, on this morning’s Treasury development but that’s the same thing as a full-out crisis for the central banks today.
And 26 year-old traders who have never seen a flat market, let alone a down market.

See also  FINANCIAL REPRESSION: 85% Of High Yield Bonds Have A Negative Real Yield
See also  85% Of High Yield Bonds Have A Negative Real Yield (And Real 30Y Mortgages Rates At -2.5% While Real Fed Funds Target Rate Is -5.12%)

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