Bond-rate curve and recession

[donaldduckmoore]

In most of the time, bond-rate curve becomes inverted and it is an indication of a recession. So that in recession, we will be able to see the inverted curve. What causes the curve to bend like that?

[Eugene]

IIRC bond-rate curve becomes inverted before the recession. It’s the first sign that the recession is coming. Traders think that 1) stock market may be overvalued; 2) the recession is coming, therefore the Fed will have to lower the rates, so we should lock in high long-term rates; it’s better to invest your money for guaranteed 5% for 10 years ahead of time if you think that yields on 1-year bonds may come down to 2% for a while. Money flows from stocks and short-term bonds into long-term bonds.

This time the curve got inverted in mid-’06 and remained inverted till mid-’07.

[Eugene]

IIRC bond-rate curve becomes inverted before the recession. It’s the first sign that the recession is coming. Traders think that 1) stock market may be overvalued; 2) the recession is coming, therefore the Fed will have to lower the rates, so we should lock in high long-term rates; it’s better to invest your money for guaranteed 5% for 10 years ahead of time if you think that yields on 1-year bonds may come down to 2% for a while. Money flows from stocks and short-term bonds into long-term bonds.

This time the curve got inverted in mid-’06 and remained inverted till mid-’07.

[Eugene]

IIRC bond-rate curve becomes inverted before the recession. It’s the first sign that the recession is coming. Traders think that 1) stock market may be overvalued; 2) the recession is coming, therefore the Fed will have to lower the rates, so we should lock in high long-term rates; it’s better to invest your money for guaranteed 5% for 10 years ahead of time if you think that yields on 1-year bonds may come down to 2% for a while. Money flows from stocks and short-term bonds into long-term bonds.

This time the curve got inverted in mid-’06 and remained inverted till mid-’07.

[Eugene]

IIRC bond-rate curve becomes inverted before the recession. It’s the first sign that the recession is coming. Traders think that 1) stock market may be overvalued; 2) the recession is coming, therefore the Fed will have to lower the rates, so we should lock in high long-term rates; it’s better to invest your money for guaranteed 5% for 10 years ahead of time if you think that yields on 1-year bonds may come down to 2% for a while. Money flows from stocks and short-term bonds into long-term bonds.

This time the curve got inverted in mid-’06 and remained inverted till mid-’07.

[Eugene]

IIRC bond-rate curve becomes inverted before the recession. It’s the first sign that the recession is coming. Traders think that 1) stock market may be overvalued; 2) the recession is coming, therefore the Fed will have to lower the rates, so we should lock in high long-term rates; it’s better to invest your money for guaranteed 5% for 10 years ahead of time if you think that yields on 1-year bonds may come down to 2% for a while. Money flows from stocks and short-term bonds into long-term bonds.

This time the curve got inverted in mid-’06 and remained inverted till mid-’07.

[donaldduckmoore]

Now that we hear a lot of recession talks, but how come the curve is not inverted anymore?

Another question is that if more money coming from the stock market and short-term bond to long-term bond, then should the 10-yr or other longer term bond rate reduce?

[donaldduckmoore]

Now that we hear a lot of recession talks, but how come the curve is not inverted anymore?

Another question is that if more money coming from the stock market and short-term bond to long-term bond, then should the 10-yr or other longer term bond rate reduce?

[donaldduckmoore]

Now that we hear a lot of recession talks, but how come the curve is not inverted anymore?

Another question is that if more money coming from the stock market and short-term bond to long-term bond, then should the 10-yr or other longer term bond rate reduce?

[donaldduckmoore]

Now that we hear a lot of recession talks, but how come the curve is not inverted anymore?

Another question is that if more money coming from the stock market and short-term bond to long-term bond, then should the 10-yr or other longer term bond rate reduce?

[donaldduckmoore]

Now that we hear a lot of recession talks, but how come the curve is not inverted anymore?

Another question is that if more money coming from the stock market and short-term bond to long-term bond, then should the 10-yr or other longer term bond rate reduce?

[cr]

ddm, I believe so, and I believe the curve is no longer inverted (temporarily at least) because the FED slashed rates 125pts in the last 30 days. Someone correct me if I’m wrong.

[cr]

ddm, I believe so, and I believe the curve is no longer inverted (temporarily at least) because the FED slashed rates 125pts in the last 30 days. Someone correct me if I’m wrong.

[cr]

ddm, I believe so, and I believe the curve is no longer inverted (temporarily at least) because the FED slashed rates 125pts in the last 30 days. Someone correct me if I’m wrong.

[cr]

ddm, I believe so, and I believe the curve is no longer inverted (temporarily at least) because the FED slashed rates 125pts in the last 30 days. Someone correct me if I’m wrong.

[Author]

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