Yield curve hits record high

[Chris]

NEW YORK (CNNMoney.com) -- The Treasury market is delivering on investors' holiday wish-list. Like most everyone else, it wants an economic recovery. And it's got a yield curve to prove it.

The closely monitored yield curve -- a key predictor of the economy -- hit a record high Tuesday, signaling that investor optimism is rising as they eye riskier (and higher yielding) assets such as stocks.

The yield curve measures the difference between shorter-term 2-year notes and longer-term 10-year note yields. The figure is now at its highest level ever at 2.86 percentage points. It finished Monday at 2.78 points, which topped the previous record of 2.76 points set in June. A year ago, the gauge was at 1.29 percentage points.

So what does this mean to you? Well, when the spread between the interest rates of the two notes widens, or the yield curve rises, it typically indicates that the economy is headed for recovery. And that's welcome news for an economy that has been mired in recession for nearly two years.

The last time the yield curve was near current levels was 1992 and 2003.

In July 1992, the yield curve was at 2.6 percentage points, and the following year, the gross domestic product -- the broadest measure of the economy -- grew nearly 3%. In July 2003, the yield curve was 2.75 points, and GDP grew almost 4% the following year.

Treasury yields suggest recovery - Dec. 22, 2009

 

[oreo]

NEW YORK (CNNMoney.com) -- The Treasury market is delivering on investors' holiday wish-list. Like most everyone else, it wants an economic recovery. And it's got a yield curve to prove it.

The closely monitored yield curve -- a key predictor of the economy -- hit a record high Tuesday, signaling that investor optimism is rising as they eye riskier (and higher yielding) assets such as stocks.

The yield curve measures the difference between shorter-term 2-year notes and longer-term 10-year note yields. The figure is now at its highest level ever at 2.86 percentage points. It finished Monday at 2.78 points, which topped the previous record of 2.76 points set in June. A year ago, the gauge was at 1.29 percentage points.

So what does this mean to you? Well, when the spread between the interest rates of the two notes widens, or the yield curve rises, it typically indicates that the economy is headed for recovery. And that's welcome news for an economy that has been mired in recession for nearly two years.

The last time the yield curve was near current levels was 1992 and 2003.

In July 1992, the yield curve was at 2.6 percentage points, and the following year, the gross domestic product -- the broadest measure of the economy -- grew nearly 3%. In July 2003, the yield curve was 2.75 points, and GDP grew almost 4% the following year.

Treasury yields suggest recovery - Dec. 22, 2009

You get that large of a difference on the yield curve it only means one thing. Higher interest rates & inflation. It's all this government spending coming back to bite us in the arse. Which in turn--will bring this economy right back down on it's knees.

Last time this happened we had double digit inflation--interest rates--30 yr. fixed mortgage rates at 18% & unemployment at 10%.

This is really nothing to cheer about--it's just a sign that it is beginning. Mortgage interest rates have been artifically low for many-many years--now the pay back is going to be hell.

 

[Chris]

NEW YORK (CNNMoney.com) -- The Treasury market is delivering on investors' holiday wish-list. Like most everyone else, it wants an economic recovery. And it's got a yield curve to prove it.

The closely monitored yield curve -- a key predictor of the economy -- hit a record high Tuesday, signaling that investor optimism is rising as they eye riskier (and higher yielding) assets such as stocks.

The yield curve measures the difference between shorter-term 2-year notes and longer-term 10-year note yields. The figure is now at its highest level ever at 2.86 percentage points. It finished Monday at 2.78 points, which topped the previous record of 2.76 points set in June. A year ago, the gauge was at 1.29 percentage points.

So what does this mean to you? Well, when the spread between the interest rates of the two notes widens, or the yield curve rises, it typically indicates that the economy is headed for recovery. And that's welcome news for an economy that has been mired in recession for nearly two years.

The last time the yield curve was near current levels was 1992 and 2003.

In July 1992, the yield curve was at 2.6 percentage points, and the following year, the gross domestic product -- the broadest measure of the economy -- grew nearly 3%. In July 2003, the yield curve was 2.75 points, and GDP grew almost 4% the following year.

Treasury yields suggest recovery - Dec. 22, 2009

You get that large of a difference on the yield curve it only means one thing. Higher interest rates & inflation. It's all this government spending coming back to bite us in the arse. Which in turn--will bring this economy right back down on it's knees.

Last time this happened we had double digit inflation--interest rates--30 yr. fixed mortgage rates at 18% & unemployment at 10%.

This is really nothing to cheer about--it's just a sign that it is beginning. Mortgage interest rates have been artifically low for many-many years--now the pay back is going to be hell.

I kind of feel sorry for you. Making things up.

The last time the yield curve was near current levels was 1992 and 2003.

America is going to come back big time.

 

[oreo]

NEW YORK (CNNMoney.com) -- The Treasury market is delivering on investors' holiday wish-list. Like most everyone else, it wants an economic recovery. And it's got a yield curve to prove it.

The closely monitored yield curve -- a key predictor of the economy -- hit a record high Tuesday, signaling that investor optimism is rising as they eye riskier (and higher yielding) assets such as stocks.

The yield curve measures the difference between shorter-term 2-year notes and longer-term 10-year note yields. The figure is now at its highest level ever at 2.86 percentage points. It finished Monday at 2.78 points, which topped the previous record of 2.76 points set in June. A year ago, the gauge was at 1.29 percentage points.

So what does this mean to you? Well, when the spread between the interest rates of the two notes widens, or the yield curve rises, it typically indicates that the economy is headed for recovery. And that's welcome news for an economy that has been mired in recession for nearly two years.

The last time the yield curve was near current levels was 1992 and 2003.

In July 1992, the yield curve was at 2.6 percentage points, and the following year, the gross domestic product -- the broadest measure of the economy -- grew nearly 3%. In July 2003, the yield curve was 2.75 points, and GDP grew almost 4% the following year.

Treasury yields suggest recovery - Dec. 22, 2009

You get that large of a difference on the yield curve it only means one thing. Higher interest rates & inflation. It's all this government spending coming back to bite us in the arse. Which in turn--will bring this economy right back down on it's knees.

Last time this happened we had double digit inflation--interest rates--30 yr. fixed mortgage rates at 18% & unemployment at 10%.

This is really nothing to cheer about--it's just a sign that it is beginning. Mortgage interest rates have been artifically low for many-many years--now the pay back is going to be hell.

I kind of feel sorry for you. Making things up.

The last time the yield curve was near current levels was 1992 and 2003.

America is going to come back big time.

If this is your experience (from 1992 to 2003) then it is I that feel sorry for you. For many decades I have traded securities--& bonds. Bragging about a yield curve that is signalling the start of higher interest rates in economic circumstances that we are currently in--is devastating for growth in this country.

The figures I quoted you are correct--18% 30 year fixed mortgages is what is coming. Look that one up--but you'll to go back farther than 1992-- Try 1979--through 1982.

 

[Chris]

You get that large of a difference on the yield curve it only means one thing. Higher interest rates & inflation. It's all this government spending coming back to bite us in the arse. Which in turn--will bring this economy right back down on it's knees.

Last time this happened we had double digit inflation--interest rates--30 yr. fixed mortgage rates at 18% & unemployment at 10%.

This is really nothing to cheer about--it's just a sign that it is beginning. Mortgage interest rates have been artifically low for many-many years--now the pay back is going to be hell.

I kind of feel sorry for you. Making things up.

The last time the yield curve was near current levels was 1992 and 2003.

America is going to come back big time.

If this is your experience (from 1992 to 2003) then it is I that feel sorry for you. For many decades I have traded securities--& bonds. Bragging about a yield curve that is signalling the start of higher interest rates in economic circumstances that we are currently in--is devastating for growth in this country.

The figures I quoted you are correct--18% 30 year fixed mortgages is what is coming. Look that one up--but you'll to go back farther than 1992-- Try 1979--through 1982.

I don't have to look it up. I was in the real estate business then.

I know you want the worst to happen, but it isn't going to. We have very good leadership now. Obama is focusing on the things that matter...healthcare, energy, and getting out of Iraq. We are going to be fine.

George Bush was a disaster, but we will recover.

 

[rightwinger]

Looks like the economy is recovering..

Great news for all Americans....bad news for those who banked on the economy failing

 

[CrusaderFrank]

There aren't enough Democrats working in the private sector so it's easy for them to totally misunderstand what things mean or how things work.

Maybe you can look to melting polar ice caps as a sign of economic recovery?

 

[Toro]

Generally, when the yield curve is steep, it is forecasting economic growth.

That is probably the case today, but this is also a very different type of recession than we've had since WWII and the dynamics are unknown given the extraordinary amount of interference by the economy.

 

[☭proletarian☭]

I don't care about the yield curve or how you want to spin it.

mark my words: if the federal government continues to expand deficit spending and we continue to have a central bank run by neo-Keynesian fucktards, we will experience a series of collapses that will get worse. This system simply is not stable.

 

[Chris]

NEW YORK (CNNMoney.com) -- Stocks ended a holiday-shortened session higher Thursday, with indexes climbing to new highs for the year after upbeat reports on the labor market and durable goods orders fueled optimism about the economic recovery.

The Dow Jones industrial average (INDU) rose 53 points, or 0.5%. The S&P 500 index (SPX) rose 6 points, or 0.5%. Both gauges are at the highest level since the first week of October 2008. The Nasdaq composite (COMP) gained 16 points, or 0.7%, to the highest level since Sept. 3, 2008.

CNNMoney.com Market Report - Dec. 24, 2009

 

[rdean]

NEW YORK (CNNMoney.com) -- Stocks ended a holiday-shortened session higher Thursday, with indexes climbing to new highs for the year after upbeat reports on the labor market and durable goods orders fueled optimism about the economic recovery.

The Dow Jones industrial average (INDU) rose 53 points, or 0.5%. The S&P 500 index (SPX) rose 6 points, or 0.5%. Both gauges are at the highest level since the first week of October 2008. The Nasdaq composite (COMP) gained 16 points, or 0.7%, to the highest level since Sept. 3, 2008.

CNNMoney.com Market Report - Dec. 24, 2009

Prepare yourself for a deluge of Republicans congratulating former president Bush.

 

[Chris]

I don't care about the yield curve or how you want to spin it.

mark my words: if the federal government continues to expand deficit spending and we continue to have a central bank run by neo-Keynesian fucktards, we will experience a series of collapses that will get worse. This system simply is not stable.

The system is stable.

Glenn Beck is not stable, however.

 

[Chris]

NEW YORK (CNNMoney.com) -- Stocks ended a holiday-shortened session higher Thursday, with indexes climbing to new highs for the year after upbeat reports on the labor market and durable goods orders fueled optimism about the economic recovery.

The Dow Jones industrial average (INDU) rose 53 points, or 0.5%. The S&P 500 index (SPX) rose 6 points, or 0.5%. Both gauges are at the highest level since the first week of October 2008. The Nasdaq composite (COMP) gained 16 points, or 0.7%, to the highest level since Sept. 3, 2008.

CNNMoney.com Market Report - Dec. 24, 2009

Prepare yourself for a deluge of Republicans congratulating former president Bush.

Good one.

America is coming back.

Now if we can just get rid of the U.S. Senate, we will be in business.

 

[☭proletarian☭]

What does Glenn Beck have to do with anything?

And no, a neo-Keynesian economy marked by an inflated money supply, moral hazard of the most unsound investments, massive deficit spending, and borrowing from nations that would like to see you gone is not stable, my dimwitted friend.

 

[Avatar4321]

Not hard to reach highs when you dropped so low this past year.

 

[Avatar4321]

I hope the economy is recovering. But Im not optimistic just because some article tells me so. Especially when the Senate has been working hard today to disrupt one of the largest industries in our economy.

 

[☭proletarian☭]

The economy will recover when we cut deficit spending, rectify the import/export balance, get the illegals out of the counrty and send employers who knowingly hire them to prison, and put an end to artificially low interest rates, bailouts, and the inflated money supply.

It's that simple.

 

[kyzr]

How bad could Bush and the GOP screw the economy up......10% unemployment and rising

after Obama we could see another depression.....unless he finds a lot of hidden loot in those numbered Swiss bank accounts and other off-shore accounts.

 

[Chris]

Not hard to reach highs when you dropped so low this past year.

It sucks being a Republican, doesn't it?

 

[loosecannon]

NEW YORK (CNNMoney.com) -- The Treasury market is delivering on investors' holiday wish-list. Like most everyone else, it wants an economic recovery. And it's got a yield curve to prove it.

The closely monitored yield curve -- a key predictor of the economy -- hit a record high Tuesday, signaling that investor optimism is rising as they eye riskier (and higher yielding) assets such as stocks.

The yield curve measures the difference between shorter-term 2-year notes and longer-term 10-year note yields. The figure is now at its highest level ever at 2.86 percentage points. It finished Monday at 2.78 points, which topped the previous record of 2.76 points set in June. A year ago, the gauge was at 1.29 percentage points.

So what does this mean to you? Well, when the spread between the interest rates of the two notes widens, or the yield curve rises, it typically indicates that the economy is headed for recovery. And that's welcome news for an economy that has been mired in recession for nearly two years.

The last time the yield curve was near current levels was 1992 and 2003.

In July 1992, the yield curve was at 2.6 percentage points, and the following year, the gross domestic product -- the broadest measure of the economy -- grew nearly 3%. In July 2003, the yield curve was 2.75 points, and GDP grew almost 4% the following year.

Treasury yields suggest recovery - Dec. 22, 2009

A high yield curve is a prediction of high long term inflation. This particular yield curve is inaccurate as the short term bond prices are suppressed by the super low interest rates that the Fed is still offering to banks that participated in TARP.

There are other interpretations of a high yield curve as well. Such as the potential for a downgrade of US bonds credit worthiness over a 10 period.