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Bond Yields Dive After a Poor ISM Report Showing a Plunge in New Orders

Evidence of recession keeps piling up. Powell needs to reassess his soft landing thesis.
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Yield curve data from the New York Fed and, chart by Mish

Yield curve data from the New York Fed and, chart by Mish

The 2-month yield and the Effective Fed Funds rates are from yesterday. The 20-year yield is my estimate. My starting point is yesterday's number and I assume a similar reaction as the 30-year long bond. 

Today's Bond Market Change 

  • 2-Year: -0.11
  • 3-Year: -0.13
  • 5-Year: -0.13
  • 7-year: -0.12
  • 10-year: -0.10
  • 30-year: -0.13

The last time I wrote about the yield curve was on June 12 in Yield Curve Inversions Return, Signaling Another Recession Warning

Here are the yields from June 14, when the 10-year yield peaked.

Yields on June 14

  • 1-Year: 3.15
  • 2-Year: 3.45
  • 3-Year: 3.60
  • 5-Year: 3.61
  • 7-year: 3.60
  • 10-year: 3.49
  • 30-year: 3.45

Yields on July 1

  • 1-Year: 2.70
  • 2-Year: 2.81
  • 3-Year: 2.86
  • 5-Year: 2.89
  • 7-year: 2.93
  • 10-year: 2.89
  • 30-year: 3.10

Change Since June 14

  • 1-Year: -0.45
  • 2-Year: -0.64
  • 3-Year: -0.74
  • 5-Year: -0.72
  • 7-year: -0.67
  • 10-year: -0.60
  • 30-year: -0.35

Multiple times in and out of inversions followed by a sudden sustained decline in yields is a strong signal that recession has started. 


What triggered today's reaction was a poor ISM report in which new orders plunged 5.9 points from 55.1 to 49.2 to contraction.

Holy Grail of Stock Jocks Shocks

Employment as Well

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Fed Will Sacrifice the Economy

The Fed Misunderstood Inflation

"ISM New orders are contracting. The Fed has no choice but to continue to sacrifice the economy in the name of inflation. Quite the trap they put themselves in last year because they 'misunderstood' inflation."

Musical Tribute 

Powell: "We understand better how little we understand about inflation”

In reference to misunderstanding inflation, please see Powell: "We understand better how little we understand about inflation”

The above link offers many quotes from the Fed, ECB, and Bank of England that show  central banks are clueless. 

On June 22, I commented I've Seen Enough, the US is in Recession Now, Q&A on Why

Forget about a soft landing. Recession has already started. The questions are how deep and how long? 

I will address those questions in another post. 

This post originated at MishTalk.Com.

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