Why is the T-note yield curve messed up?

Discussion in 'Economics' started by noob_trad3r, Mar 19, 2012.

  1. 10 is 2.27 and 30 is only 3.39 Thats only a 112 basis point spread. Why is that happening and is it sustainable?
  2. Huh?

    112 is actually pretty steep... Highest it's been is smth like 160, lowest arnd 0, mean 50, median 42 (using data from 1993 onwards).
  3. Why would I want to loan for 30 years vs 10 for such a small difference?
  4. It's the same old "reasons":
    1) The US can still be looked upon as being "creditworthy" despite the appearance of horrible underlying fundamentals. :D
    2) There can be excessive speculation in the market that is bullishly biased. :eek:
    3) Investors/traders are "looking for yield" and agressively buying longer-dated issues. :cool:
    4) The FED may want to maintain the ~0% "target" on fed funds longer than people expect. :mad:
    5) The 112 point spread may look "better" if you compare it to the 30-year yield instead of to itself. :)
  5. Its small only in nominal numbers, the 30yr is actually yielding 50% more than the 10yr, its a big difference if you look at it that way.

  6. Well, I dunno about you, but that's where the mkt is... If you think this spread should be higher, you know what to do, right?
  7. Daal


    what is the standard dev?
  8. 36.1924 is what I see.