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Mon Dec 3, 2018, 06:54 PM

The Flattening Yield Curve Just Produced Its First Inversions

https://www.bloomberg.com/news/articles/2018-12-03/the-flattening-yield-curve-just-produced-its-first-inversion

A section of the U.S. Treasuries yield curve just inverted for the first time in more than a decade.

The spread between 3- and 5-year yields fell to negative 1.4 basis points Monday, dropping below zero for the first time since 2007, and the 2- to 5-year gap soon followed. The 2- to 10-year is more closely watched as a potential indicator of pending recessions. But Mondayís move could be the first signal that the market is putting the Federal Reserve on notice that the end of its tightening cycle is approaching.

Some analysts attributed the short-end underperformance to demand for riskier assets as global trade tensions eased following this weekendís tariff truce between U.S. President Donald Trump and Chinaís Xi Jinping. Others pinned it to modestly higher expectations for Fed hikes next year after the summit between the two leaders. Either way, the five-year is faring better because investors anticipate the end of the central bankís hiking path beyond next year.

To read more about why an inverted yield curve matters, click here


Texas natural gas also inverted over the weekend (it effectively sells for a negative amount).

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Reply The Flattening Yield Curve Just Produced Its First Inversions (Original post)
Recursion Dec 3 OP
flibbitygiblets Dec 3 #1
2naSalit Dec 3 #2

Response to Recursion (Original post)

Mon Dec 3, 2018, 06:56 PM

1. Here we go.

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Response to Recursion (Original post)

Mon Dec 3, 2018, 07:31 PM

2. Buckle up!

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