The inversion chart came in a Tweet. I do not have a link to the analysis.
If the Fed gets in 4 hikes this year, I would expect the curver to invert sooner. CME Fedwatch shows a nearly 50% chance of at least four hikes.
It's also possible the economy falls to pieces and the next move is a cut. Under that scenario, inversion may be a long time coming.
Mike "Mish" Shedlock
Investors Increasingly believe the Fed may hike four or more times in 2018. The inflation scare is picking up steam.
The Fed is expected to hike on Dec 18 and perhaps in Mar 2019. The rise in the 3-month yield reflects that expectation.
The Fed hiked 1/4 point with no unexpected discussion. A Dot plot shows Fed participants believe 3 more hikes are coming
The 5-year to the 3-year portion of the yield curve inverted today. Inversion is typically a prelude to recession.
The yield curve inverts when the Fed keeps hiking in the face of a slowdown.
Futures positions imply a 92% chance the Fed will hike in Dec and 50% again in March. How will the yield curve respond?
The St. Louis Fed president Jame Bullard has a spotlight on yield curve inversion, and he wants to prevent one.
Yields dropped across the board today as the Fed said it would be patient. A "Dot Plot" shows no hikes expected in 2019.
The US Treasury 5-year yield is now inverted with 3, 2, and even the 1-year treasury yield.
