Friday, October 18, 2019

An important update on the yield curve

 - by New Deal democrat

For the last 10 months, readers of the financial press have been bombarded with stories about the inverted yield curve, where (some) longer term interest rates are lower than shorter term interest rates. I track them too! But they are by no means my only forecasting tool.

In any event, in the past several months and weeks, the yield curve has resumed a much more normal configuration. So does that mean we are in the clear?

It depends which measure you are paying most attention to. Which has always been an important caveat, because the inversion of the yield curve has, with the exception of about one week several months ago, always been partial - i.e., at least one “infallible” indicator must have been wrong.

My “just the facts, ma’am” look at what the un-inversion of the yield curve has meant over the past 50 years was posted at Seeking Alpha.

As usual, clicking over and reading rewards me just a little bit for my efforts.