Yield Curve Inversion

Is it differnt this time?


Of course it is! Because interest rates!

Not sure, but certainly makes it hard to put money in the market.

USD is a good risk off safe haven. So is JPY.

I hear you and understand the conventional wisdom of not falling into this time its different rationalization. At the same time I struggle with all of these heavily distortive impacts of monetary policy so who knows. I don’t see it coming from the US so I feel pretty confident if there is a risk of a recession it has to originate somewhere else.

Sup brain wash brah. It is slowly becoming different because 10y rates are on a persistent downward trend. In 1990, 10y rate was 10%. It has been going down in a straight line this whole time. Overlay the actual 10y rate on top of that chart for the same period and ask again if it looks different. The implication of inversion to policy and the economy changes approaching the rate floor.

Is this sign of an imminent economic change? Most likely not. However, like climate change, it’s not a sudden catastrophe that will kill you. It’s more of a slow build up of a condition that might become more problematic gradually over time.