Automatic Pilot Spotlight

Image placeholder title

Let's flashback to Fed Chair Jerome Powell's statements following the December 19 FOMC meeting.

Powell was asked about the Fed's balance sheet and quantitative tightening.

We thought carefully about how to normalize policy and came to the view that we would effectively have the balance sheet run off on automatic pilot and use monetary policy, rate policy to adjust to incoming data. I think that has been a good decision. I think that the runoff of the balance sheet has been smooth and has served its purpose and I don't see us changing that. And I do think that we will continue to use monetary policy, which is to say rate policy as the active tool of monetary policy.

I commented Shut Up! Shut Up!

Image placeholder title

Automatic Pilot

RECOMMENDED ARTICLES

Automatic pilot, what a hoot.

Today, I repeat, "What a Hoot".

The 7-year, 5-year, and 3-year notes all all about 50 basis points lower. And the yield curve is inverted in 28 places.

Yield Curve to Scale

Image placeholder title

Synopsis

  • The yield curve is inverted from the 1-year note through 13 years.
  • The yield curve is inverted from the 3-month T-bill through the 10-year note.
  • The yield curve is inverted in 28 places.

Those who thought the recession signal was over, thought wrong.

Mike "Mish" Shedlock

Recession Without an Inverted Yield Curve? Sure, Why Not?

Japan had six consecutive recessions without an inverted yield curve. There is no reason it can't happen here.

Yield Curve Recession Watch: 7-Year Treasury Yield Inverts With 1-Year

The yield curve is inverted in six places. Notably, the 1-year T-Bill yield inverts with all durations through 7 years.

Why the Yield Curve Inverts in One Simple Picture

The yield curve inverts when the Fed keeps hiking in the face of a slowdown.

Yield Curve Inverted Out to Seven Years

Portions of the yield curve are once again inverted all the way out to 7 years.

Canadian and Australian Yield Curves Invert- Clear Recession Signals

Those looking for clear recession signals in Canada and Australia have them. Portions of the Canadian and Australian yield curves are now inverted. Canada has been in a state of inversion for at least four weeks.

What Spot in the Yield Curve is Likely to Invert First?

The yield curve has flattened considerably over the last year. Will it invert? Where? The following chart explains.

China's Yield Curve Inverts: Will the US Follow?

China's macro picture tumbled to its weakest since August 2016. Portions of the yuan yield curve inverted again as China attempts to rein in property bubbles and state-owned enterprise (SOE) excesses. The US yield curve hasn't inverted yet. What's in the cards?

Yield Curve Will Invert From the Inside Out

How does the yield curve invert? Jim Bianco at Bianco Research says "Inside Out"

Yield Curve is Inverted for Nearly 25 Years

Using the Fed Funds Rate as the baseline overnight duration, the yield curve is inverted for nearly 25 years.