This too shall pass. ( Inverted treasury curve)

Discussion in 'Economics' started by eurusdzn, Mar 23, 2019.

  1. srinir

    srinir

    I am truly saddened by hollowing out all the venerable institutions. One thing to put his doctor in charge of VA and his personal pilot to head FAA, but totally ridiculous to put pizza boy and another half baked economist as Fed. governor. Combine this with his son-in-law as policy advisor and daughter as a soft diplomat. This is truly banana republic. US used to make fun of other countries, now has become laughing stock.
     
    #31     Apr 5, 2019
    Cuddles, destriero and Seaweed like this.
  2. sle

    sle

    The main problem is that Fed appointees are long-term, similar to the Supreme Court. I sure hope the Senate does not approve, but that would open the door to all sorts of issues. Fed was truly the last bastion of technocracy and if it changes we are all fucked.
     
    #32     Apr 5, 2019
  3. srinir

    srinir

    I am not holding my breadth, all of them will fall in line.
     
    #33     Apr 5, 2019
  4. tsznecki

    tsznecki

    @sle You touched a little upon this in another thread, but currently SOFR and FF still trade highly correlated. Unless it breaks down, is it that big of an issue?
     
    #34     Apr 5, 2019
  5. ironchef

    ironchef

    I don't understand half of what you folks said or discussed. So, what should us retail traders do?

    Thank you.
     
    #35     Apr 5, 2019
  6. sle

    sle

    #36     Apr 5, 2019
  7. srinir

    srinir



    How can these people go wrong?
    Bullish on Bush: How George Bush's Owenership Society Will Make America Stronger
    Foreword by Kudlow, author Stephan Moore our next Fed governor
     
    #37     Apr 5, 2019
  8. eurusdzn

    eurusdzn

    Wouldn't these two gentlemen have to sit at the kiddie table and not play with their food.
    I think they might last months , quit, and switch to piano lessons. Sad to joke this way of our billionares.
     
    #38     Apr 5, 2019
  9. sle

    sle

    Well, the problem with stuff like FRA/OIS or FF/SOFR is that when it does breakdown, it means that something went bump. I'll write a bit more detailed explanation later.
     
    #39     Apr 5, 2019
  10. srinir

    srinir

    Here are some additional items from the FOMC minutes

    The FOMC isn't concerned about a flat/inverted curve because of the "unusually low level of [Treasury] term premiums."

    Several participants expressed concern that the yield curve for Treasury securities was now quite flat and noted that historical evidence suggested that an inverted yield curve could portend economic weakness; however, their discussion also noted that the unusually low level of term premiums in longer-term interest rates made historical relationships a less reliable basis for assessing the implications of the recent behavior of the yield curve. Several participants pointed to the increased debt issuance and higher leverage of non-financial corporations as a development that warranted continued monitoring.
     
    #40     Apr 11, 2019
    sle likes this.