Recession is real? inversion of treasury US10Y to US03M
UUS10Y-US03M
An inverted yield curve is when the yields on bonds with a shorter duration are higher than the yields on bonds that have a longer duration. It's an abnormal situation that often signals an impending recession.
In a normal yield curve, the short-term bills yield less than the long-term bonds. Investors expect a lower return when their money is tied up for a shorter period. They require a higher yield to give them more return on a long-term investment.
When a yield curve inverts, it's because investors have little confidence in the near-term economy. They demand more yield for a short-term investment than for a long-term one. They perceive the near-term as riskier than the distant future. They would prefer to buy long-term bonds and tie up their money for years even though they receive lower yields. They would only do this if they think the economy is getting worse in the near-term.
An inverted yield curve is most worrying when it occurs with Treasury yields. That's when yields on short-term Treasury bills, notes, and bonds are higher than long-term yields. The U.S. Treasury Department sells them in 12 maturities. They are:
One-month, two-month, three-month, and six-month bills.
One-year, two-year, three-year, five-year, and 10-year Treasury notes.
30-year bonds.
During healthy economic growth, the yield on a 30-year bond will be three points higher than the yield on a three-month bill.
An inverted yield curve means investors believe they will make more by holding onto a longer-term Treasury than a short-term one. They know that with a short-term bill, they have to reinvest that money in a few months. If they believe a recession is coming, they expect the value of the short-term bills to plummet soon. They know that the Federal Reserve lowers the fed funds rate when the economy slows. Short-term Treasury bill yields track the fed funds rate.
Conclusion: Even if past data is not sure to confirm to future, We can check that when it came in the past, recession has been realized and this negative value is here to confirm that the technical data shows us that Economical US market is dive a very bad possible situation.
This is information, even if it is not a way to suggest you any kind of form of investment, but it is a form to give a point of view a point of reflession to open our mind and to be ready to start a trading position in any informed and good condition for all traders.
Thank you
An inverted yield curve is when the yields on bonds with a shorter duration are higher than the yields on bonds that have a longer duration. It's an abnormal situation that often signals an impending recession.
In a normal yield curve, the short-term bills yield less than the long-term bonds. Investors expect a lower return when their money is tied up for a shorter period. They require a higher yield to give them more return on a long-term investment.
When a yield curve inverts, it's because investors have little confidence in the near-term economy. They demand more yield for a short-term investment than for a long-term one. They perceive the near-term as riskier than the distant future. They would prefer to buy long-term bonds and tie up their money for years even though they receive lower yields. They would only do this if they think the economy is getting worse in the near-term.
An inverted yield curve is most worrying when it occurs with Treasury yields. That's when yields on short-term Treasury bills, notes, and bonds are higher than long-term yields. The U.S. Treasury Department sells them in 12 maturities. They are:
One-month, two-month, three-month, and six-month bills.
One-year, two-year, three-year, five-year, and 10-year Treasury notes.
30-year bonds.
During healthy economic growth, the yield on a 30-year bond will be three points higher than the yield on a three-month bill.
An inverted yield curve means investors believe they will make more by holding onto a longer-term Treasury than a short-term one. They know that with a short-term bill, they have to reinvest that money in a few months. If they believe a recession is coming, they expect the value of the short-term bills to plummet soon. They know that the Federal Reserve lowers the fed funds rate when the economy slows. Short-term Treasury bill yields track the fed funds rate.
Conclusion: Even if past data is not sure to confirm to future, We can check that when it came in the past, recession has been realized and this negative value is here to confirm that the technical data shows us that Economical US market is dive a very bad possible situation.
This is information, even if it is not a way to suggest you any kind of form of investment, but it is a form to give a point of view a point of reflession to open our mind and to be ready to start a trading position in any informed and good condition for all traders.
Thank you
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