Mark Thoma asks: When should we worry about the yield curve?
Chart courtesy of Angry Bear
Note that each inversion (spread < 0) preceded a recession.
Here’s how falt we are:
FED Funds Rate: 4.5% (overnight)
6 Month CD 4.37%
Five Year Note: 4.54%
Ten Year Note: 4.54%
30 Year Bond: 4.53%
Let me remind you that last year, the S&P500 gained about 4% — about what you would get from a CD, but with quite a bit more risk.
That factoid is another element why if the market starts to fade, more than a few equity holders will see it as an unpleasant repeat of 2005.
I can imagine that during any "unpleasantness," the so-called weak hands will dominate not only the selling, but the lack of buying interest, too.
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.