📈The current uninversion of the yield curve suggests a potential bull steepening case.
🌍The uninversion of the yield curve has global implications.
📉The bear steepening case, which is not bullish, indicates a recessionary period.
📊The bull steepening case suggests a soft landing and better growth.
💡Pay attention to the movement of the 2-year Treasury for further insights.
What is the yield curve?
—The yield curve is a graphical representation of interest rates on debt for a range of maturities. It shows the relationship between interest rates (or cost of borrowing) and the time to maturity of the debt.
What does it mean when the yield curve uninverts?
—When the yield curve un inverts, it indicates a potential shift in interest rates. It can either result in a bear steepening case or a bull steepening case.
What is the bear steepening case?
—The bear steepening case occurs when long-term rates go above short-term rates, indicating a recessionary period.
What is the bull steepening case?
—The bull steepening case suggests that long-term rates start to go up faster than short-term rates, leading to a soft landing and better growth.
Why is the uninversion of the yield curve significant?
—The uninversion of the yield curve is significant as it provides insights into the future direction of interest rates and the overall economic outlook.
00:00The front end of the yield curve is on a tear again, while the back end is on a pause.
01:59The yield curve was close to uninverting in October, indicating a potential bear steepening case. However, it was just a temporary effect.
04:19The yield curve inversion is a global trend with implications for the Eurodollar system.
08:11The 2-year Treasury is a key indicator to watch for insights into the bull steepening case.
