The Yield Curve Inverts, Again

Hickey and Walters (Bespoke) submit: After ten continuous months of inversion, the yield curve (spread between the yield on the three-month and ten-year U.S. treasuries) reverted back to a positive slope for the first time on May 18th. From there, the spread widened at a quick pace to a high of 62 basis points on June 15th.

Since then however, it has been all down hill, as the curve quickly became inverted once again on July 20th and has remained so ever since.

click to enlarge

Comments

[GaryCCB]

And?

2007 Aug 06 11:53 PM

[Jonathan Almy]

I don't think that there is any correlation between an inverted yield curve and current market conditions - unless the fed believes that it ought to bail out the greedy on wall street - which we already know hasn't happened. Inflation is still troublesom, the dollar is still weak, and the unwinding of leverage is good long-term -dont expect rates to fall antime soon.

2007 Aug 07 03:31 PM