Yield Curve is Inverted for Nearly 25 Years

-edited

Using the Fed Funds Rate as the baseline overnight duration, the yield curve is inverted for nearly 25 years.

Yield Curve - Overnight Fed Funds Rate Through 30 Years

Click on chart to expand.

Synopsis

  • Using the Fed-Funds Rates as the zero-duration starting point, the yield curve is inverted for 99 quarters, nearly 25 years.
  • If we use the 3-month T-Bill as the starting point (2.105%), the yield curve is "only" inverted for 58 quarters, 14.5 years.

New Home Sales

On Tuesday, a Census Department housing report showed New Home Sales Plunge 35.9% in the West, 7.8% Overall, Prices Down 8.1%

Powell Bluff

Also on Tuesday, Powell Chastised Trump and Praised Himself in one of the most self-serving Fed speeches in history.

Specifically, in a blast pointed directly at Trump, Powell proclaimed "The Fed is insulated from short-term political pressures—what is often referred to as our 'independence.''"

What a hoot.

Uncle!

The Fed will cry uncle in July.

Expect at least one 25 basis point rate cut.

The market has a 100% chance of at least one cut.

Meanwhile - We Still Have Questions

Dear Jerome Powell, instead of patting yourself on the back and answering fluff prepared questions, how about addressing some real questions?

  • Let's discuss the Fed's economic models and their miserable performance.
  • Let's discuss bubbles.
  • Let's also debate the Fed's inflation expectation theory. I can logically show the theory is nonsense.

Answers Please

Hello Jerome Powell, We Have Questions

Please have a go at it, Mr. Powell.

Mike "Mish" Shedlock

Comments (9)
No. 1-3
RonJ
RonJ

"Yield Curve - Overnight Fed Funds Rate Through 30 Years"

Subtracting debt from GDP, what has been the real GDP growth over the last 30 years? Debt creates an illusion.

Subtract debt from housing. What are homes really worth?

Subtract debt fueled buybacks from the stock market. What is the stock market really worth?

KidHorn
KidHorn

The entire bond market can be explained by almost all new issues are bought up by central banks. Countries have excess reserves due to money printing and have no where to park them but in each others bond markets. No individual would ever pay, say $103, for a bond with a coupon rate of 0.5%. You would only do that if it was the only thing you could do with the money.

lol
lol

Tax revenue hasn't been collapsing for 25 years like it is now,fed hasn't been printing money and buying/owning well....everything for 25 years like there are now.