Since October 1, the 30-year to 3-year flattened 52 basis points with the 30-year long bond yield dropping 6 basis points and the 3-year rising 46 basis point.
Treasury Yields October 1 vs November 22
One Day Change
Bearish Flattener
On the reappointment of Jerome Powell, yields rose across the board but with yields from 2 years to 20 years all rising more than the 30-year long bond.
This is known as a bearish flattener.
A bearish steepener happens when yield rise across the board with the long end of the curve steepening more.
A bullish flattener happens when yields drop across the board and the long end of the curve drops more.
What About Inversions
The 30-year long bond yield has pretty much been stuck in a wide range centered around 2.0% while yields in the middle of the of the curve have risen dramatically.
The 20-year to 30-year spread is -5 basis points (inverted).
The 7-year to 10-year spread is only +8 basis points. I expect inversion there next.
By next June when the Fed is finally done tapering and allegedly ready to hike rates, the yield curve may be hugely inverted and signaling recession.
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Mish
“Over the past four decades, I’ve also collected scores of interesting syndromes and relationships that tend to occur at market extremes, which I often discuss using terms like “overextension,” “dispersion,” and “reversal.” Occasionally, these are significant enough to prompt an interim update, outside of my regular market comments.
Well, on Friday, November 19, we hit the motherlode. Across four decades of work in the financial markets, and over a century of historical data, I’ve never observed as many historical indications of a market peak occurring simultaneously.”
to hike rates, the yield curve may be hugely inverted and signaling
recession.”