Stock prices could use a correction. But I don’t see that stopping the economic growth train we are on now - just a slight slow down.
No recession - unless we let the media talk us into one with their fear mongering and Trump hate.
When interest rates are this low I think it means exactly squat.
This widespread loss of confidence explains why inverted yield curves have proceeded every recession since 1956.
...
Wrong.
An Inverted yield curve means the Federal Reserve is manipulating short term interest rates to be much higher than what the market would charge.
The Fed does this to put the brakes on economic growth, because they incorrectly believe that economic growth causes inflation
Economic weakness is what triggers inflation. Ask yourself how Venezuela has such high inflation and Zimbabwe before them.
The world is lined up around the block to buy long term US treasuries.
In some parts of the world there is a negative interest rate on national treasuries. Of course they want ours. Naturally the yield will go down if you don’t need to produce an incentive to buy-—duh
The truth does not meet the narrative of the global cabal objective to make Trump look bad.
cnbc is FAKE NEWS
The article is a lot of useless talk.
This is about the difference between 1.603% and 1.6% The difference is negligeable! ($3 yearly on a principal of $100,000.)
The graph starts at 1.60% at the bottom, and goes to 1.70% at the top. Not much difference, but it is exaggerated by the exaggerated scale of the chart. The numbers are not far from each other. Then there’s the ominous arrow pointing DOWN! Ohhh! scary!
The real purpose of the article is to use the word “recession.” It is used so that it will be picked up and quoted endlessly. They really want Trump defeated!
The article is a fraud.
Is it another Soros manufactured crisis like before?
What I don’t hear mentioned much is the concept that MAYBE the reason the long term are valued lower than short term is because many investors are hinging the economy’s future more on politics than they used to, and in 10 years we are much much more likely not to have Trump-like economic policies than we are to have in 2 years.
All this inversion is saying is an affirmation that Trump and his policies are good for the economy and for investment.
The fear of losing Trumpinomics is what is driving down long term yields
This CNBC guy ignores the broader view which is capital flows back and forth between equity and bond markets.
With the stock market climbing steadily until recently, the bond markets have less bidders which can only drive bond prices down and effective interest rates up.
Short term interest versus long term interest are not as statistically notable as volumes of treasuries nearing maturity.
Equations that summarize the yield curves are based on statistical models that are prone to sensitivity. A sensitivity analysis can pinpoint change points that cause model instability. As new data enters, the sensitivity points change.
Reporting inverted yield curves and then sensationalizing it is what CNBC and the moribund financial press do. They pull headlines out of thin air to sell themselves as seers when in fact they are no better than clowns on parade.
The broader view is that the Trump Administration is working around the clock to transform American industry back to production from predominately servicing businesses. The country will relearn what it means to make things.
The pundits of the financial press have had their day. Don’t listen to their astrological prognosticating rants.
Interesting, informative, educational discussion. Thanks to all posters.
CNBC lost credibility in the year 2000.
Our bond market is being distorted by billions in foreign cash pouring in due to negative rates elsewhere. Our current economic data is solid. I am with Mohamed El-Erian on this topic: https://youtu.be/MzKLs8l9UPM