Posts filed under “Inflation”
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.