CME Fedwatch has 48% Chance of at Least Four Hikes in 2018. Inversion When?

Deutsche Bank research suggests the yield curve will invert in 2019. I suggest sooner if the Fed hikes 4 times.

The inversion chart came in a Tweet. I do not have a link to the analysis.

If the Fed gets in 4 hikes this year, I would expect the curver to invert sooner. CME Fedwatch shows a nearly 50% chance of at least four hikes.

It's also possible the economy falls to pieces and the next move is a cut. Under that scenario, inversion may be a long time coming.

Mike "Mish" Shedlock

Comments
No. 1-25
truthseeker
truthseeker

have to be excessive supply. Aren’t we selling record amounts of debt at every auction? Watching all this rates have started moving up but if they keep moving up it’s going to really hurt housing and leveraged debtors which will slow growth even more. Anyway to try to make my point, if this disinflation continues, it seems like the Fed seeing an opportunity here would start selling excessive amounts of treasury and mortgage backed securities adding to supply that at some point cause rates to move up again causing the Fed to back off and wait and watch rates begin to slide again thus another opportunity to sell more of this huge amount debt once again. I don’t know if I’m making any since here, so I wish I hadn’t started making these remarks in the first place.

truthseeker
truthseeker

to include the government. Corporate and consumer I think setting records, so it would

truthseeker
truthseeker

Hey Mish I was thinking about what could make you b wrong about the direction of interest rates. It certainly is not going to a pickup in growth for a great number of reasons mostly having to do with excessive debt at every level with the government,
cor

Ambrose_Bierce
Ambrose_Bierce

They have to get that bond auction off the ground screw the yield curve full speed ahead

truthseeker
truthseeker

Mish you are right so I should have made this distinction between the opinions made on the CME and the Fed. Nevertheless ever so often a member of the the Fed will make a remark to prepare or even warn the markets if they are not correctly factoring in a rate hike or rate cut.

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