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August 25, 2018 | Flattening Yield Curve in One Picture

Mike 'Mish' Shedlock

Mike Shedlock / Mish is a registered investment advisor representative for SitkaPacific Capital Management. Sitka Pacific is an asset management firm whose goal is strong performance and low volatility, regardless of market direction.
The flattening yield curve is a topic of much discussion. The lead chart shows various spreads it in one picture.

Spread Values

Spread Values in Basis Points

  • 10-7 Spread: 04 Basis Points
  • 10-5 Spread: 10 Basis Points
  • 10-2 Spread: 21 Basis Points
  • 05-2 Spread: 11 Basis Points

This cannot possibly mean what is used to mean (i.e. the Fed is tightening into a recession).

How do I know?

In his speech today, Fed Chairman Jerome Powell did not mention “yield curve even once”. Instead he talked about “moving stars”.

Mike “Mish” Shedlock

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August 25th, 2018

Posted In: Mish Talk

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