Federal Reserve Chairman Alan Greenspan announced in Congressional Testimony today that the "yield curve was no longer a useful gauge of the economy."

Greenspan also downplayed the risk of big foreign holders of US Debt.

In related news, the Onion reported that upon retirement, Greenspan will be joining the Conference Board, where he would be placed in charge of the Leading Economic Indicators.

Category: Economy, Fixed Income/Interest Rates

Please use the comments to demonstrate your own ignorance, unfamiliarity with empirical data and lack of respect for scientific knowledge. Be sure to create straw men and argue against things I have neither said nor implied. If you could repeat previously discredited memes or steer the conversation into irrelevant, off topic discussions, it would be appreciated. Lastly, kindly forgo all civility in your discourse . . . you are, after all, anonymous.

9 Responses to “Greenspan: Yield Curve ‘No Longer Useful’ Gauge Of Economy”

  1. mh497 says:

    Rumor has it he said “It’s different this time” also, but we’re still trying to find it in the statement.

  2. donna says:

    Inversion? What inversion?

  3. Klaw says:

    Thanks for the links.
    Grace be with you………..

  4. jimbo says:

    man, Greenie gonna put the boys of ECRI out of business w/ all that stuff. lol

  5. scorpio says:

    talk about “no longer useful”. g’bye alan!

  6. Algernon says:

    Greenspan is right concerning the yield curve. This is a unique phenomenon of our central bank’s restraint being over-ridden by Asian central banks & other foreigners buying our 10-yr notes.

  7. STS says:

    I didn’t find that quotation in the text of Greenspan’s testimony (at least not at the URL provided). Is there some other source, or were you paraphrasing?

    He pretty clearly implies that the yield curve needs to be interpreted differently because of the impact of globalization on expected future inflation, but “no longer useful” seems a bit beyond his meaning.

  8. calmo says:

    This is what I call Greenspan’s pep talk.
    Don’t worry. [Because he does.]
    But umpteen 25bp increments later, it sinks in: I could’ve raised 50bp maybe even 75. Now, as the spread is moving, but maybe still contracting, is the time to blow the horn: “I’m not afraid of any ole yield curve invertion. I’m not.”
    Sorta.

  9. me says:

    Why do I always lose when someone says “Its different this time”?