• 587 days Will The ECB Continue To Hike Rates?
  • 587 days Forbes: Aramco Remains Largest Company In The Middle East
  • 589 days Caltech Scientists Succesfully Beam Back Solar Power From Space
  • 989 days Could Crypto Overtake Traditional Investment?
  • 994 days Americans Still Quitting Jobs At Record Pace
  • 996 days FinTech Startups Tapping VC Money for ‘Immigrant Banking’
  • 999 days Is The Dollar Too Strong?
  • 999 days Big Tech Disappoints Investors on Earnings Calls
  • 1,000 days Fear And Celebration On Twitter as Musk Takes The Reins
  • 1,002 days China Is Quietly Trying To Distance Itself From Russia
  • 1,002 days Tech and Internet Giants’ Earnings In Focus After Netflix’s Stinker
  • 1,006 days Crypto Investors Won Big In 2021
  • 1,006 days The ‘Metaverse’ Economy Could be Worth $13 Trillion By 2030
  • 1,007 days Food Prices Are Skyrocketing As Putin’s War Persists
  • 1,009 days Pentagon Resignations Illustrate Our ‘Commercial’ Defense Dilemma
  • 1,010 days US Banks Shrug off Nearly $15 Billion In Russian Write-Offs
  • 1,013 days Cannabis Stocks in Holding Pattern Despite Positive Momentum
  • 1,014 days Is Musk A Bastion Of Free Speech Or Will His Absolutist Stance Backfire?
  • 1,014 days Two ETFs That Could Hedge Against Extreme Market Volatility
  • 1,016 days Are NFTs About To Take Over Gaming?
  1. Home
  2. Markets
  3. Other

What's the Fed up to when Yield Curves "De-Invert"?

The chart below shows a history of the spread between the yield on the 10-year Treasury security and the fed funds rate starting in 1965. Also plotted in the chart is the level of the fed funds rate. Notice that when the spread moves from a negative value to a positive value, that is, when the yield curve "de-inverts," the fed funds rate has begun to fall. If history is any guide, then, don't look for the negative spread between the Treasury 10-year and fed funds to turn positive until the FOMC begins cutting the fed funds rate. Today's ADP private nonfarm payroll forecast notwithstanding, do look for the FOMC to begin cutting the fed funds rate no later than March 21, when it will become obvious even to Greg Ip's Fed sources that economic growth is at stall speed and inflation is the last war.

Chart 1
10-Yr. Treasury - Fed Funds Rate Spread vs. Fed Funds Rate
percent

 

Back to homepage

Leave a comment

Leave a comment