2019-04-09 11:29:00 Tue ET
federal reserve monetary policy treasury dollar employment inflation interest rate exchange rate macrofinance recession systemic risk economic growth central bank fomc greenback forward guidance euro capital global financial cycle credit cycle yield curve
The U.S. Treasury yield curve inverts for the first time since the Global Financial Crisis. The key term spread between the 10-year and 3-month U.S. Treasury yields dives below nil (i.e. the latter now exceeds the former by a positive increment). In response, Dow Jones tumbles 400 points as this brief yield curve inversion sparks recessionary concerns.
Treasury yield curve inversions have indeed preceded all of the 7 U.S. recessions since the 1970s. From a fundamental perspective, these key yield curve inversions reflect the pervasive fear that firms become reluctant to raise debt to fund positive net-present-value capital investment projects when households tend to fixate on near-term consumption with minimal leverage for longer-run investments in stocks, bonds, and real estate properties.
A flat or negative yield curve suggests that investors prefer to keep their money in short-term bonds as longer-term bonds exhibit greater reinvestment risk.
Whether the current yield curve inversion portends an economic recession in the next few years depends on the eventual resolution of economic policy uncertainty around Sino-American trade compromises, fiscal budget negotiations, and Federal Reserve interest rate adjustments from 2019 to 2020. This inversion may signal a stark sign of major economic events from a typically emphatic bellwether.
If any of our AYA Analytica financial health memos (FHM), blog posts, ebooks, newsletters, and notifications etc, or any other form of online content curation, involves potential copyright concerns, please feel free to contact us at service@ayafintech.network so that we can remove relevant content in response to any such request within a reasonable time frame.
2017-12-07 08:31:00 Thursday ET
Large multinational tech firms such as Facebook, Apple, Microsoft, Google, and Amazon can benefit much from the G.O.P. tax reform. A recent stock research r
2019-04-09 11:29:00 Tuesday ET
The U.S. Treasury yield curve inverts for the first time since the Global Financial Crisis. The key term spread between the 10-year and 3-month U.S. Treasur
2018-08-17 11:45:00 Friday ET
In accordance with the extant corporate disclosure rules and requirements, all U.S. public corporations have to report their balance sheets, income statemen
2019-01-21 10:37:00 Monday ET
Andy Yeh Alpha (AYA) AYA Analytica financial health memo (FHM) podcast channel on YouTube January 2019 In this podcast, we discuss several topical issues
2019-07-21 09:37:00 Sunday ET
Facebook introduces a new cryptocurrency Libra as a fresh medium of exchange for e-commerce. Libra will be available to all the 2 billion active users on Fa
2019-01-02 06:28:00 Wednesday ET
New York Fed CEO John Williams listens to sharp share price declines as part of the data-dependent interest rate policy. The Federal Reserve can respond to