One of the bond-market’s most reliable indicators of impending U.S. recessions is pointed in a pretty pessimistic direction right now, but it contains at least one optimistic message.
One of the bond market’s most reliable indicators of impending U.S. recessions is pointed in a pretty pessimistic direction right now, but contains at least one optimistic message: The Federal Reserve will remain committed to its battle on inflation and, some analysts say, should ultimately win it.
Higher and stickier yields at the front end of the curve are “a sign of Fed credibility,” with the central bank seen committed to keeping monetary policy restrictive for longer to rein in inflation, said Subadra Rajappa, head of U.S. rates strategy for Société Générale. “Unfortunately, tighter policy will lead to demand destruction and lower growth, which is keeping long-end yields depressed.
Ordinarily, the Treasury yield curve slopes upward, not downward, when the bond market sees brighter growth prospects ahead. In addition, investors demand more compensation to hold a note or bond for a longer period of time, which also leads to an upward sloping Treasury curve. That’s part of the reason why inversions grab so much attention. And at the moment, multiple parts of the bond market, not just the 2s/10s spread, are inverted.
Ireland Latest News, Ireland Headlines
Similar News:You can also read news stories similar to this one that we have collected from other news sources.
Most deeply negative Treasury curve in more than four decades has one upbeat takeaway for investorsOne of the bond-market's most reliable indicators of impending U.S. recessions is pointed in a pretty pessimistic direction right now, but contains at least...
Read more »
One More Time — EVs And The Federal Tax CreditChanges to the federal tax credit for electric vehicles introduce lots of new provisions. Here's what we know so far.
Read more »
Breakingviews - China decoupling takes one step forward, one backWealthy democracies want to cut their reliance on China. The People's Republic too has moved to become more self-sufficient. Tariffs, sanctions and suspicion have redirected flows of human and financial capital, and this week’s political protests in China may accelerate the trend. But decoupling remains more a geopolitically driven aspiration than economic fact.
Read more »
First gold coins of the season dropped in Salvation Army Red KettlesOne was a one-ounce gold American Buffalo coin that is valued at $2,000.
Read more »
Joseph Goodman: Auburn signals win at all costs with hiring of Hugh FreezeColumnist JoeGoodmanJr writes that 'the leaders who are hiring [Hugh] Freeze are taking a huge chance with someone who has more baggage than a Boeing 747 full of in-laws headed home for the holidays.'
Read more »
Treasury yields slip as investors assess impact of China’s Covid policyTreasury yields pulled back as investors closely watched Covid developments in China and digested comments from Fed officials on monetary policy plans.
Read more »