The 2/10 Year Yield Curve is currently inverted, which means there's a high chance of recession in about 12 months. Based on all the market indicators I'm looking at, seems like it could be kind of a bad one as they need to keep interest rates decently high to combat inflation while also killing the market.

Oh well, this has needed to happen pretty badly since about 2014, and they managed to keep delaying it. I might actually end up buying a house within a year or two.

It’s all part of the great reset!

It will be a period of stagflation.

Biden really is Carter 2.0

The recessions been "coming in the next 12 months" for the last 3 years.

Wtf is a yield curve

https://www.zerohedge.com/markets/si...coming-soon-q2

Can't read it since I am premium, unless other members got premium access.

Wrong. In the last 100 years, there has been an inverted yield curve about 12 times. A recession happened 6 out of those 12 times. So according to the yield curve, there is a 50% chance of recession.

Highly doubt it, we've never had this type of labor shortage before. It's literally a black swan event. The confidence at which people are quitting jobs because they know they can easily find another job is at the highest it has ever been. This sht is fking nuts.

The entire world is fuked up beyond belief in an unprecedented way. Logic says it’s not getting any better. I bet everything on a recession.

You watch reventure too?

I've read that the Japanese fed is causing the yield curb. They are manipulating the US 10 year bond. That can be read about here ~

https://www.billionairesportfolio.co...ategory/latest

excerpt:

....As a reminder, this is the spread between the 10-year and 2-year Treasury yields. This had declined to 23 basis points when we looked at it on March 8th. Today it's just 2 basis points (the 10-year yield is at 2.39%, and the 2-year yield is at 2.37%). Why does this matter? Each of the six recessions, dating back to 1955, were preceded by a yield curve inversion. Recession followed between 6 and 24 months.

Now, with that in mind, you would not be going out on a limb to call for a Fed-induced recession to come in the next 24 months (regardless of what this chart above tells you). After all, as we've discussed, the last time the Fed had to deal with an inflation problem like we're seeing now, they had to ramp rates ABOVE the rate of inflation, to bring inflation under control. That would be applying a heavy foot on the brakes of the economy.

But within this outlook, we should expect such a yield curve inversion to happen at much higher levels of interest rates. It would be reasonable to expect the inversion to take place because the 2-year yield is aggressively moving higher (along with the Fed Funds rate), not because the 10-year yield is stagnating at historically low levels, and then aggressively moving lower. That doesn't project a hot economy, where the Fed is just starting a tightening campaign (from emergency level rates).

So, what's happening to push the 10-year yield aggressively lower the past two days? It may have everything to do with Japan.

The Bank of Japan intervened twice yesterday in the Japanese government bond market — buying JGBs in "unlimited amounts" to put a lid on rising bond yields (at just 25 basis points on the 10-year).

This "yield curve control" is, and has been, explicitly part of the BOJ's game plan to promote economic activity in Japan. But what is becoming clear, is that policy change in the U.S. is pulling all global interest rates higher. It's unwelcome. The 10-year yield in Germany has swung from negative 10 basis points, to positive 74 basis points, just this month! The 10-year yield in Japan is at six year highs, the highest levels since they adopted the plan to outright suppress Japanese yields back in 2016.

With this in mind, and the actions by the Bank of Japan this week, the move in the U.S. 10-year yield today may be a signal that "yield curve control" could be coming to a central bank near you.....

This recession is going to be like Coachella only with uglier people and more dumbfuks who can't count to five without using their fingers and toes.

alrighty then

The past decade or two are completely in uncharted territories. What has been common logic/knowledge in the past does not really apply to current markets. We are living in interesting times and I have no idea where this will lead us.

Yield curve plots the rates on bonds at their respective maturities ranging from 1 month to 30 years

https://www.marketwatch.com/investin...countrycode=bx



Inverted 2yr vs 10yr means that 2yr bonds are paying out more than 10yr bonds despite tying up that money for an additional 8 years.

I think the idea when looking at the two-ten spread and inversion is essentially that higher interest rates now will subdue economic growth over a 10-year horizon. But it's just one indicator and some would argue the 10-year bond is undervalued and may catch up when the Fed unwinds its balance sheet.

All of this ties into banks as well since banks borrow on short-term bonds and lend on long-term bonds, so they would theoretically be losing money with an inverted yield curve if they were generally borrowing at 2 years and lending at 10 years.

the housing crash is like the cure for balding...only 2 years away

good we still have a few months to make some $ in the melt up ...

Hopefully

World ending, news at 11.

I saw something about that, then they said, back in 2006 the curve inverted, wasn’t until years later that it happened.


I feel like this may be a correlation that they are forcing into a causation.

I understand prior to 1955 or so, this was not a reliable tool to project certain outcomes.

Not an expert. Just heard some thing s

We would have had a pretty bad recession in 2020 if they didn't dump $5 Trillion dollars into the economy........ That is why we have such bad inflation. They can't do it again, so we finally have to face the fire.

what kind of finance professional are you?

obviously not a good one

no understanding of macro econ and you gon get rekt boi

Everything right now is pointing at a recession. Even the Fed has acknowledged it this week, saying they were trying to give a "soft landing".

The reason they are increasing interest rates this year is to give themselves ammo to combat it. The last 6 recessions were predicted by an Inverted Yield Curve.

100 years is a terrible timeline for this stat, that's a completely arbitrary amount of time and monetary policy was completely different. Really there's no sense in comparing monetary policy today to anything that happened before the early 1970s when the US was still on the gold standard.

What will you do if your expectation of future spot rates are less than those implied by the forward curve?

thanks for the brain teaser Bradley but I don't play in TradFi

you are a mid-tier Canada cuck finance pepsi professional

What can I do to prepare/exploit this?

This is how I've been feeling about it. And for anyone wanting some deets on how very strange things are this is a pretty good primer:





"Levels of peace time debt this high always presage a systemic collapse of the world system.

You never get out of this much debt peacefully."- 11:00

Cliffs:Depression/Collapse possible within the next 3 years.

For a good article about the yield curve inversion and what that's about:
https://seekingalpha.com/article/449...-near-or-is-it

Cliffs:A 2-10 inversion occured prior to 5 recessions starting with 1981; the 3 month-10 year inversion happened prior to all of the recession.

Based on what I've seen I agree. Will be selling leaps if we reach new all time highs

Recessions don’t eve last longer than a year typically so who really gives a sh*t unless you’re a poorcel who can’t weather the storm of 1 year recession.

I don't even notice any of this stuff stuff is actually cheaper than ever tbh