Yield Curve

Bond Vigilantes Butting Heads With Washington's Profligate Crowd

Dec 19, 2024 3 min read paid

Ed Yardeni
Eric Wallerstein

September Has Been A Busy Month So Far

Sep 4, 2024 3 min read paid

During the first two trading days of September, stock prices, oil prices, and bond yields fell sharply; the Department of Justice (DOJ) subpoenaed Nvidia in its antitrust probe; Bank of Japan (BOJ) Governor Kazuo Ueda reaffirmed his hawkish monetary policy stance; US job openings were lower-than-expected; and, the US Treasury yield curve pancaked. Furthermore, the Fed's Beige Book reported that nine out of 12 Federal Reserve regional districts

Ed Yardeni
Eric Wallerstein

Beige Book Paints Beige Economic Picture

Nov 29, 2023 2 min read

The bond market liked today's Beige Book, the collection of regional surveys of economic activity conducted by each of the 12 Fed district banks. While Q3's real GDP growth was revised up to a red hot 5.2%, the latest survey from October 6 to November 17 was more like a cool beige color. Six of the 12 Fed banks reported slight declines in economic activity.

Ed Yardeni

Bond Yield Climbs to 4.50% As Yield Curve Is Disinverting.

Sep 21, 2023 2 min read paid

The Fed's hawkish pause, announced on Wednesday afternoon, has lifted the 10-year US Treasury yield to 4.50% this evening. We think it might consolidate here for a while consistent with our view that the yield has normalized back to where it was from 2003-2007, i.e., before the Great Financial Crisis (GFC). Back then, the 10-year TIPS yield and the expected inflation spread hovered around 2.00%

Ed Yardeni

Leading & Coincident Economic Indicators Are Contradictory

Jun 22, 2023 2 min read paid

The Index of Leading Economic Indicators (LEI) peaked at a record high during December 2021. It dropped 0.7% m/m in May and declined for the 14th month in a row, but there’s still little evidence the US is headed toward recession. Indeed, the Index of Coincident Economic Indicators (CEI) edged up by 0.2% m/m during May to yet another record high (chart). The Conference Board,

Ed Yardeni

Jamie's Hurricane

Mar 9, 2023 2 min read

JPMorgan Chase CEO Jamie Dimon has been warning that a recession is coming. Today, ironically, the bank stocks took it on the chin sending the overall stock market lower because the economy is widely deemed to be too strong, and a solid gain is expected in February's payroll employment tomorrow. Furthermore, fears that next Tuesday's CPI report for February might be higher than expected raised concerns

Ed Yardeni

Bonds Weigh On Stocks

Dec 27, 2022 1 min read paid

The 10-year US Treasury bond yield rose from a recent low of 3.425% on December 7 to 3.849% today, the highest since early November. We still believe it peaked at 4.248% on October 12. The spread between the 10-year and 2-year US Treasuries remained inverted at 50bps today. An inverted yield curve tends to coincide with the end of monetary policy tightening cycles and peaks in the

Ed Yardeni

Yield Curve Spread Signaling Rate Peak

Nov 27, 2022 2 min read

The yield curve spread between the 2-year US Treasury note and the 10-year US Treasury bond is a leading indictor of several cyclical financial and economic developments. It tends to invert (i.e., to turn negative) before economic downturns (chart). So it tends to predict recessions. We think that yield curve inversions actually predict that the Fed's monetary policy is getting too tight, which could trigger a financial

Ed Yardeni

Is Something About To Break?

Oct 2, 2022 1 min read paid

The 2-year/10-year Treasury yield curve has been inverted in recent weeks. The yield curve has a history of inverting during Fed monetary tightening cycles when investors start to believe that the rise in interest rates may be about to cause a financial crisis, which quickly turns into a widespread credit crunch and a recession. Is something about to break now? Not according to the VIX and high-yield corporate bond

Ed Yardeni

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