Yield Curve Inverted Out to Seven Years

-edited

Portions of the yield curve are once again inverted all the way out to 7 years.

I took that snapshot last night it is slightly different this morning. I will add the 6-month T-bill in the next iteration of that table.

Yield Curve 2019-02-19

Yield on the 6-month bill this morning is 2.507% down 0.16. The 5-year, 3-year, and 2-year treasuries are all inverted with the 6-month bill.

The recession music band keep playing.

Mike "Mish" Shedlock

Comments (6)
No. 1-5
lol
lol

DC burnin through cash like a hot night through butter,easily 2 trillion in red ink ("officially") this year ,and wait for it …….3TRILLION IN THE RED 2020.....a sea of red!

Hannah1
Hannah1

Can anyone explain this skyrocketing stock market? I visit here at least 5 times a day to learn economics since Khan academy recommended, what am I missing?

CCR
CCR

Inversion not likely to mean anything. Strong dollar keeping a lid on carry trades, and with Fed all but saying interest rate hikes are done and no inflation (outside of assets) levering lower beta is gonna be in vogue. Long end to short end not inverted, so nothing really to see. Managers load up on front end during fed ease cycles.

CCR
CCR

@ Hannah1 - Strong sentiment towards buying is all. Don't confuse economics with the stock market.

Realist
Realist

Hi Hannah1. It’s one thing to understand economic concepts; it is far more challenging to apply those concepts. Economics is a social science (not a natural science) which deals with human behaviour. And humans are notoriously unpredictable. Natural science deals with facts or truths (like gravity), that explain how the natural world works. It is far easier to apply natural sciences (physics, chemistry etc).

So even though there are many people on this site (including Mish) who understand economics, their economic predictions will rarely be accurate. For example, Mish has been pessimistic about the long term prospects for the economy for many years. Yet the economy continues to chug along at a modest 2% growth rate ( for 10 years now). Personally, I believe the economy will continue to grow at 2% for another year or two, or possibly for many more years. Of course, eventually, a recession will happen and those who “predicted it” will finally be right.

And as CCR said, don’t confuse the stock market with the economy; they can easily move in opposite directions. If you followed the investing advice from Mish, over the last 10 years, you would have been heavily invested in gold while avoiding the stock market, and you would have missed a lot of gains.