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Two-Year Treasury Yield Highest Since 2007, Everything Inverted Over 1 Year

Yields keep rising and most Fed members are itching for more hikes, recession or not.
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Treasury Yields May 24 to September 20 2022

Yield Curve to Scale

Yield Curve to Scale 2022-09-20

The yield curve chart above is easy to read and understand. The curve from 1 year through 7 years is inverted with the long end of the curve.

The curve has been inverted in places for over a year. This is a recession signal and I believe the economy went into recession in May. 

The Fed is merrily hiking away and is likely to keep doing so until it breaks something big time. The Fed will hike 75 basis points tomorrow and the market thinks another 75 basis points is coming in November. 

If so, it is doubtful the markets will like it much. 

Housing Starts Unexpectedly Soar In August as Housing Permits Crash

Earlier today I noted Housing Starts Unexpectedly Soar In August as Housing Permits Crash

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The bond market reaction was as if the report was residential construction report was strong. It wasn't. The GDPNow model reacted the way I thought it would.

GDPNow Forecast for 2022 Q3 2022-09-20

For discussion, please see GDPNow Forecast for 2022 Q3 Barely Positive Following Housing Starts Report.

This post originated at MishTalk.Com

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