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Is The Fed Panicking: Yield Curve Tumbles To Fresh 11-Year Lows - Zero Hedge - 03-28-2018

Is The Fed Panicking: Yield Curve Tumbles To Fresh 11-Year Lows

<p>Despite the stock market's Amazon-bounce gains, US Treasury yields are lower and the yield curve flatter once again - <strong>tumbling to its flattest since Oct 2007</strong>.</p>

<p>Deja vu all over again...</p>

<p><a data-image-external-href="" data-image-href="/sites/default/files/inline-images/2018-03-28_9-31-44.jpg?itok=Lqrt4Z3B" data-link-option="0" href="https://www.zerohedge.com/sites/default/files/inline-images/2018-03-28_9-31-44.jpg?itok=Lqrt4Z3B"><img data-entity-type="file" data-entity-uuid="8375cfe8-3fe5-43d5-986d-4368649a0926" data-responsive-image-style="inline_images" height="281" width="500" srcset="https://www.zerohedge.com/sites/default/files/styles/inline_image_desktop/public/inline-images/2018-03-28_9-31-44.jpg?itok=Lqrt4Z3B 1x" src="https://www.zerohedge.com/sites/default/files/inline-images/2018-03-28_9-31-44.jpg" alt="" typeof="foaf:Image" /></a></p>

<p>10Y Yields are holding below 2.80%...</p>

<p><a data-image-external-href="" data-image-href="/sites/default/files/inline-images/2018-03-28_9-28-28.jpg?itok=pjFVcCMc" data-link-option="0" href="https://www.zerohedge.com/sites/default/files/inline-images/2018-03-28_9-28-28.jpg?itok=pjFVcCMc"><img data-entity-type="file" data-entity-uuid="a90400b4-3495-4a91-95af-2649677d8ab4" data-responsive-image-style="inline_images" height="262" width="500" srcset="https://www.zerohedge.com/sites/default/files/styles/inline_image_desktop/public/inline-images/2018-03-28_9-28-28.jpg?itok=pjFVcCMc 1x" src="https://www.zerohedge.com/sites/default/files/inline-images/2018-03-28_9-28-28.jpg" alt="" typeof="foaf:Image" /></a></p>

<p> </p>

<p>And the yield curve has crashed to fresh flats not seen since Oct 2007...</p>

<p><a data-image-external-href="" data-image-href="/sites/default/files/inline-images/2018-03-28_9-12-18.jpg?itok=_fgnf1Cz" data-link-option="0" href="https://www.zerohedge.com/sites/default/files/inline-images/2018-03-28_9-12-18.jpg?itok=_fgnf1Cz"><img data-entity-type="file" data-entity-uuid="bdc035df-9e6e-4b81-a5f4-8422ea646791" data-responsive-image-style="inline_images" height="262" width="500" srcset="https://www.zerohedge.com/sites/default/files/styles/inline_image_desktop/public/inline-images/2018-03-28_9-12-18.jpg?itok=_fgnf1Cz 1x" src="https://www.zerohedge.com/sites/default/files/inline-images/2018-03-28_9-12-18.jpg" alt="" typeof="foaf:Image" /></a></p>

<p> </p>

<p>The entire curve is rolling over...</p>

<p><a data-image-external-href="" data-image-href="/sites/default/files/inline-images/2018-03-28_9-27-58.jpg?itok=0fSZVqXG" data-link-option="0" href="https://www.zerohedge.com/sites/default/files/inline-images/2018-03-28_9-27-58.jpg?itok=0fSZVqXG"><img data-entity-type="file" data-entity-uuid="e8420264-984e-4fac-89e4-c6ceaa423f46" data-responsive-image-style="inline_images" height="263" width="500" srcset="https://www.zerohedge.com/sites/default/files/styles/inline_image_desktop/public/inline-images/2018-03-28_9-27-58.jpg?itok=0fSZVqXG 1x" src="https://www.zerohedge.com/sites/default/files/inline-images/2018-03-28_9-27-58.jpg" alt="" typeof="foaf:Image" /></a></p>

<p>As a reminder, Bloomberg notes that according to the minutes of the Federal Open Market Committee’s Jan. 30-31 meeting, the most recent for which minutes are available, showed that<em><strong> some policy makers thought it important “to monitor the effects of policy firming on the slope of the yield curve,” noting the strong association between curve inversions and recessions.</strong></em></p>

<p><a href="https://www.zerohedge.com/news/2018-03-12/fed-admits-yield-curve-collapse-matters">Which confirms what The San Francisco Fed warned</a>... <a href="https://www.frbsf.org/economic-research/publications/economic-letter/2018/march/economic-forecasts-with-yield-curve/"> about the flattening of the yield curve</a>...</p>

<blockquote>
<p>"<strong>[it] is a strikingly accurate predictor of future economic activity. </strong></p>

<p><strong>Every U.S. recession in the past 60 years was preceded by a negative term spread, that is, an inverted yield curve. </strong></p>

<p>Furthermore, a negative term spread was <strong>always followed by an economic slowdown and, except for one time, by a recession</strong>."</p>
</blockquote>

<p>Furthermore, as the two Fed authors explain below, the recent decline in the Treasury curve is sending recession probabilities notably higher.</p><img src="http://feeds.feedburner.com/~r/zerohedge/feed/~4/GnDaRsfglzM" height="1" width="1" alt=""/>


http://feedproxy.google.com/~r/zerohedge/feed/~3/GnDaRsfglzM/fed-paniccing-yield-curve-tumbles-fresh-11-year-lows