Bonds, Yields curves and what they say about the economy

Discussion in 'Economics' started by maxitronixy, Feb 25, 2010.


    The link should show 2 year, 5 year, 10 year and 30 year (yield curve from left to right of the chart,

    at the bottom of the screen in this link click yields 101

    What does inverted yield curves say about the economy?

    Can somone enlighten me? what is the relationship about fear, greed yield curves and the state/ expectations of the economy?

    Inverted curve +recession, normal curve -etc

    I can;t remember what my lectuer said about when the economy is good, people bid up bond prices( this could be wrong) etc

    shift to long term bonds in bad times etc

    and why does cnbc show bond yield curves during benerke's testimony?
    what does yield cruves say?
  2. no explnations?
  3. Negative yield curve differential is generally good for the stock market looking forward.

    Often you look at the slope. If it is steeply rising, this is generally followed by positive return. If it is steeply falling (inverted), this is not good.

    Currently it is very steeply positively sloped;
    a very strong sign for markets looking forward (despite all the horrible news).

    One way to think about it is if short term t-bills are paying 0%, while e/p yields are running ~5% or so, where would you want to park your money?
  4. wave


    10-Year Treasury is key.
  5. why is 1o year treasury key? Why not 1 year or 30 year?