Yields Reveal a Mini-Revolt On the Long End

  • 3-Month Yield: 0.04%
  • 1-Year Yield: 0.06%
  • 2-Year Yield: 0.11%
  • 3-Year Yield: 0.20%
  • 5-Year Yield: 0.50%
  • 10-Year Yield: 1.20%
  • 30-year Yield: 2.01%

Yield Curve Dramatically Steepens

Yield Spreads 2-10 and 2-30 201-02-14A

Notes

  1. In July of 2018 the spread between the spreads was only 12 basis points with the 2-30 spread at 38 basis points and the 2-10 spread at 26 basis points.
  2. The 2-30 spread at 1.83 is higher than any time since February 10, 2017.
  3. The 2-10 spread at 1.07 is higher than any time since April 7, 2017.

RECOMMENDED ARTICLES

Fed Losing Control of Long End

  1. On February 8, the Fed noted Monetary Policy Will Stay Accommodative For a Very Long Time. I commented "Like Forever".
  2. On February 10, in a speech on the labor market Powell said the True Unemployment Rate is Actually 10%

In Powell's speech, he reiterated the message rates would stay low.

But spreads have widened dramatically which begs the question: 

How long before the Fed openly intervenes to push rates lower on the long end of the curve?

Mish

Currency War Intensifies, Dollar Strengthens: How Long Before Trump Reacts?

The ECB cut rates further into negative territory and the BoJ is expected to do the same. How long before Trump reacts?

How Much Can the Fed Hike Before the Yield Curve Inverts?

The market expects a 100% chance of a hike in June and a 78.2% chance of at least one more hike by September. Then what?

Wait-and-See Fed Cites Leaves Rates Unchanged, Notes Lower Inflation

Bond yields are lower across the board with inversions widening following the Fed's decision to hold rates steady.

Fed Eyes Long Pause, No Rate Hikes in 2020

The Fed held rates steady today citing low inflation. Members expect a long pause.

NY Fed President Proposes "Paying" Bankers With Long-Term Debt

What a topsy-turvy world we live in thanks to Fed nonsense. Consider the outgoing NY Fed president's latest brainchild.

Second Fed Governor Proposes Targeting the Short and Long End of the Yield Curve

Two Fed governors now propose targeting the long end of the yield curve if there is another recession.

Greenspan Foresees 5% Interest Rates: “Only One Long-Term Direction and That is Up”

In a Bloomberg Interview, former Fed chairman Alan Greenspan says “fairly soon” we could see a shift away from excessively low interest rates.

On Average, How Long From Inversion to Recession?

Let's take a look at the last six recession. How long did it take from inversion to recession?

Fed Gets Opposite Response It Wanted: Inversions Strengthen

Counting the FF Rate, the yield curve flattened quite a bit but inversions between 3-month and long end widened.