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December 29, 2018 | Inversions Galore!

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 number of US Treasury bond inversions took a big leap today. I count 5 inversions, three of them with the 1-Yr bill.

In this snapshot, the 5-year, 3-year, and 2-year treasury yields inverted with the 1-year yield.

In addition, the 3-year yield inverted with the 2-year yield and the 3-month with the 1-month.

Debt Worries?

Despite the flattening and now inverting yield curve, note that the spread between the 10-year and 7-year bond actually rose over the course of 2018.

The spread between the 30-year long bond and the 10-year note is nearly what it was a year ago.

I believe this is a strong bond market signal that the end of the bond bull market approaches. It’s possible it’s already over. But I do expect one more strong push lower in yields as recession hits in 2019.

We have enormous deficits as far as the eye can see from a starting point of $21 trillion in debt.

Got Gold?

Mike “Mish” Shedlock

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December 29th, 2018

Posted In: Mish Talk

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