But it’s mostly a function of Coronavirus fears and the Fed’s very widely telegraphed activities in the overnight repo market – flushing the system with cash to stabilize an otherwise mundane, routine process that can occasionally be overwhelmed by high demand for dollars, for a variety of reasons.
Here’s a chart I made of the collapse in the 10-year Treasury minus 3-month Treasury spread…
You can see that spreads broke back above positive in October, and now they’re headed back to breakeven or possibly negative (inversion). Understand that this is happening in response to things other than the state of the US economy, which is doing exactly what it’s been doing for a long time – somewhere between 2 and 2.5% GDP growth, quarter after quarter, with the labor market at multi-decade highs for employment. Official GDP figures for Q4 2019 came in this morning at a slow but steady 2.1%. Yes, it’s backward looking, but it’s also remarkably consistent.
I’m a New York City-based financial advisor at Ritholtz Wealth Management LLC. I help people invest and manage portfolios for them. For disclosure information please see here.
Get a Full Investor Curriculum: Join The Book List
Every month you'll receive 3-4 book suggestions--chosen by hand from more than 1,000 books. You'll also receive an extensive curriculum (books, articles, papers, videos) in PDF form right away.
… [Trackback]
[…] Information on that Topic: thereformedbroker.com/2020/01/30/theyre-going-to-invert-the-yield-curve-again/ […]
… [Trackback]
[…] Find More to that Topic: thereformedbroker.com/2020/01/30/theyre-going-to-invert-the-yield-curve-again/ […]
… [Trackback]
[…] Read More here to that Topic: thereformedbroker.com/2020/01/30/theyre-going-to-invert-the-yield-curve-again/ […]
… [Trackback]
[…] Find More on that Topic: thereformedbroker.com/2020/01/30/theyre-going-to-invert-the-yield-curve-again/ […]
… [Trackback]
[…] Find More here on that Topic: thereformedbroker.com/2020/01/30/theyre-going-to-invert-the-yield-curve-again/ […]
… [Trackback]
[…] Read More on on that Topic: thereformedbroker.com/2020/01/30/theyre-going-to-invert-the-yield-curve-again/ […]
… [Trackback]
[…] There you can find 88465 additional Info to that Topic: thereformedbroker.com/2020/01/30/theyre-going-to-invert-the-yield-curve-again/ […]
… [Trackback]
[…] Here you will find 60020 additional Info on that Topic: thereformedbroker.com/2020/01/30/theyre-going-to-invert-the-yield-curve-again/ […]
… [Trackback]
[…] Info on that Topic: thereformedbroker.com/2020/01/30/theyre-going-to-invert-the-yield-curve-again/ […]
… [Trackback]
[…] Find More Info here on that Topic: thereformedbroker.com/2020/01/30/theyre-going-to-invert-the-yield-curve-again/ […]