Yield Curve

From Bloomberg

block trddd

The end of/ or profit taking in the Flattening of the Yield continues today.Yield curves function as an Indicator they flatten or steepen for various  economic reasons and portend growth or recessions.US yield curve has  trended flatter for weeks in fact the 5/30 was the tightest in 10 +years.What Changed ?The Trump tax plan announcement is what changed.Steepening of Yield curve indicates a couple of things 1) Rising Inflation Expectations 2)Stronger Economic growth 3) in the case of tax cuts an increase in deficits that will be funded by selling more treasuries.All of the movement last 2 days is due to some type of tax cut being implemented.The size and  timing still not known  but yield curve is on its way to readjusting for this impact .

5/30 yield spread below

45 30 curve

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s

This site uses Akismet to reduce spam. Learn how your comment data is processed.