Cause... the Fed can't....lol 01/10/2007 13:39 *DJ Fed's Moskow: Yield Curve Inversion Hard To Explain ----- p.s. : this time is different
They don't want to admit it's inverted. It's a dead ringer predictive indicator of recessions. Anytime I hear "but, but, this time it's different" I hurry up and pay the check and leave.
One neglected "reason" is because of enormous leveraged hedge fund buying versus other derivatives farther out on the curve. That buying supports the long end of the curve. The Fed has much more influence over the short end. If mortgage defaults become a bigger problem, the yield curve might have a better chance of steepening.