When 'the yield curve' inverts in the bond market, recessions typically follow.
The spread between three-month and 10-year US Treasury yields has inverted for the first time since 2007.since 1955.
When the interest yield on the 10-year US Treasury bond becomes the same or lower as the two-year bond, recessions have often followed. That"inversion" was the first since 2007, Bloomberg said. The spread between the yields suggests that bond investors are more worried about getting a return in the short-term than they are for the long term. That means they're betting on a decline in US growth.between the two- and 10-year yield before the recessions of 1981, 1991, 2000, and 2008. An inversion on that part of the yield curve has preceded all nine US recessions since 1955.
Why? Because a flat or negative yield curve suggests investors believe keeping your money in short-term bonds is more uncertain than bonds that pay off a decade from now. Think about it. That position doesn't make sense. Why would you be more certain about 2028 than 2020? Thus, when the curve inverts, it signals something very risky is happening in the near-term asset markets.The curve reacts to a lot of things. For instance, it reacts to how investors feel about risk in other assets.
United States Latest News, United States Headlines
Similar News:You can also read news stories similar to this one that we have collected from other news sources.
Opinion | Trump is likely emboldening hate groups. Time for tougher questions about it.Opinion: Trump is likely emboldening hate groups. Time for tougher questions about this.
Read more »
Why Theranos founder Elizabeth Holmes wasn't interviewed for HBO's 'The Inventor' documentary'The Inventor' director Alex Gibney explains why Elizabeth Holmes wasn't interviewed for the movie.
Read more »
Opinion | Progressive candidates help one person: TrumpOpinion: henryolsenEPPC writes that progressive candidates are only helping Trump
Read more »
Turkey escalates crackdown on dissent six years after Gezi protestsUnzile Aksakoglu struggles to explain to her seven-year-old daughter why her fat...
Read more »
The First Full Trailer For 'Toy Story 4' Is Finally HereWhy are there still three more months to wait until June 21?!
Read more »
Here's Our First Proper Look At 'Toy Story 4'Why are there still three more months to wait until June 21?!
Read more »
MySpace Music: A Forgotten Casualty Of The Streaming WarsHere's why you aren't making MySpace playlists in 2019:
Read more »
Cramer: US-China trade talks is now more about a 'trust gap' than the 'trade gap'Jim Cramer explains why he thinks President Donald Trump plans to leave tariffs in place and why the Federal Reserve helped in his trade standoff with China.
Read more »