Posted on 01/29/2020 12:45:42 PM PST by SeekAndFind
NEW YORK (Reuters) - A closely watched bond market phenomenon has again flashed yellow, but investors are loathe to give it much weight.
Yields on the 10-year Treasury note briefly fell below those of the 3-month bill early Tuesday for the first time since October, on concerns over the economic impact of the coronavirus. An inverted yield curve has historically been an indicator of looming recession as it tends to reflect worries over future growth among bond investors.
However, worries about the coronavirus have so far done little to shake the upbeat growth views many investors and analysts had going into 2020.
“The state of the U.S. economy seems to be steady as she goes,” said Michael Lorizio, senior fixed income trader at Manulife Asset Management. “To really forecast any chance of near-term recession I think I’d need to see more fundamental support from economic indicators, not just relying on the yield curve.”
Various portions of the Treasury yield curve inverted in 2019 for the first time in years, sparking concerns that a recession may be looming. Some of those worries faded after the Federal Reserve delivered three rate cuts and said it is unlikely to tighten monetary policy in the near future, buoying prices for stocks and boosting investor bullishness: a recent UBS Global Wealth Management survey of high-net worth investors showed that 94% expected positive returns in 2020, while a fund manager poll from Bank of America Merrill Lynch showed stock allocations at their highest level in 17 months.
(Excerpt) Read more at reuters.com ...
That tears it, we can’t afford to support
illegals so stop their handouts
and keep their remittance $ in our economy too
Well, ‘Rooters’ may know finance and investing, but this lowly public school graduate knows the correct form of the word to use in this sentence.
Hard to you seriously when you don’t know your verbs from your adjectives...
But in the beady brain of any mainslime media fake, the thought of anything related to the President, such as his economic successes, triggers an immediate Palovian attack of fear and loathing, subliminally present in 85% of the cases.
The good news is that housing is peaking, and it usually has a cycle peak around 2.5 - 3 year prior to the onset of a recession.
Trump should play them on it.
“Well looks like it time for Taxcut 2.0 as we been saying to kick the economy back into high gear”.
The thought just went through my beady little mind; Whether between the Fed jiggling interest rates, and Wall Street messing with financial details, the two of them can trigger a recession anytime they want one? And the “yield reversal” is just one of the knobs they jiggle to make it happen. Honest question.
It inverted a bunch of times in 2019. There’s no specific benchmark.
It’s where any Treasury note of shorter duration pays more interest than a longer note.
it Looks to me like the Fed is having trouble keeping the pump primed. They raised their interest rate target and they keep pumping money into the economy and that decreases the value of the dollar. We have an enormous debt bubble and it looks to me like our economic growth is a little too tepid to keep pace with the adverse effects if spending.
Recessions may be preceded by an inverted yield curve, but few inverted yield curves are followed by a recession.
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