US yield curve steepest since 1980

[xela]

Re: US yield curve steepest since 1980

Just don't forget that the long end doesn't rise on its own.. so who is selling it? (edit: assuming that it's not just due to the auctions that get no bidders at too low rates).
That would be much more interesting to know, not that there are many large holders who would qualify.

[blazespinnaker]

Re: US yield curve steepest since 1980

The bank can only borrow at low rates for the short term. For the long term, they have to predict the long bonds just like everyone else.

Fortunately, the Fed is buying MBS right now below market so they're good to go there..

A steep yield curve is predicting either regular inflation (involving increasing employment levels) or stagflation (involving decreasing employment levels but still higher prices).

Stagflation is pretty rare, so most people assume it's predicting regular inflation.

[icm63]

Re: US yield curve steepest since 1980

The bank can only borrow at low rates for the short term. For the long term, they have to predict the long bonds just like everyone else.

Fortunately, the Fed is buying MBS right now below market so they're good to go there ..

The FED is done buying its own POOP, hence the $3 dollar rally in the TBT the last couple of days, I expect this to go to $60 thats the 10 yr yield over 4.5% or 5%...fun times coming...