US Treasury Bond Market Yield Curve

By: Nadeem_Walayat

That was one hell off a drop in the 2 year yield yesterday, went straight from 5% to 4%. Now US rates are on par with where they were when the S&P was trading at 4200, of course it's not as simple as that, the rate fell in response to the Fed bailout of the banking crime syndicate. Still this should be positive for stocks.

(Charts courtesy of stockcharts.com)

This chart shows how the US yield curve has evolved since the start of the year where yesterday (pink) yields fell more sharply at the shorter end than the longer end resulting in a narrowing of the inversion. between the 2 year and the 10 year. For a clearer [picture focus on the red (12th March) vs the pink (13th March) curves to see the magnitude of the change.

What does this mean?

It means the market is not only discounting no further rate hikes but also several rate CUTs this year, Is that going to happen? I doubt it! I still think the Fed will raise rates until the Fed funds rate exceeds CPI, so maybe 1 or 2 more 0.25% rate hikes.

So interest rates have taken a nose bleed dive as the market correctly discounts the fact that what the Fed fears most is a financial crisis that could easily spiral out of control and thus seek to do their utmost to prevent a repeat of the near death experience of 2008. Which is another reason why all those bandying around charts of 2008 expecting a rerun during first 2022 and now 2023 are going to be disappointed. The Fed of pre Lehman's collapse no longer exists, the Fed since is determined to never witness a repeat of 2008 and hence the weekends shock and awe announcement that caught the bears by surprise, we'll what did they think the Fed was going to do? Let 2008 repeat?

This article is an excerpt from SVB Collapse Buying Opportunity Counting Down to Resumption of Stocks Bull Market that was first made available to patrons who support my work.So for immediate first access to ALL of my analysis and trend forecasts then do consider becoming a Patron by supporting my work for just $5 per month. https://www.patreon.com/Nadeem_Walayat.

Immediate first access to ahead of the curve analysis as my extensive analysis of the stock market illustrates (Stocks Bear Market Max PAIN - Trend Forecast Analysis to Dec 2023 - Part1), that continues on in the comments section of each posted article, all for just 5 bucks per month which is nothing, if you can't afford 5 bucks for month then what you doing reading this article, 5 bucks is nothing, if someone did what I am doing then I would gladly pay 5 bucks for it! Signup for 1 month for a taste of the depth of analysis that cannot be beat by those charging $100+ per month! I am too cheap! I am keeping my analysis accessible to all, those willing to learn because where investing is concerned the sooner one gets going the better as portfolios compound over time, $5 month is nothing for what you get access to so at least give it a try, read the comments, see the depth of analysis, you won't be sorry because i do do my best by my patrons, go the extra mile.

And gain access to the following most recent analysis -

• Stock Market S&P Swings Analysis Going into Earnings Season
• SVB Collapse Buying Opportunity Counting Down to Resumption of Stocks Bull Market
• Stock Market Counting Down to Pump and Dump US CPI LIE Inflation Data Release
• Stock Market Completes Phase Transition, US Real Estate Stocks - Housing Market Part1
• S&P500, Gold, Silver and Crypto's Trend Forecasts 2023
• Stocks Bear Market Max PAIN - Trend Forecast Analysis to Dec 2023 - Part1
• Stock Market Analysis and Trend Forecast Oct 2022 to Dec 2023 - Part 2

So for immediate first access to to all of my analysis and trend forecasts then do consider becoming a Patron by supporting my work for just $5 per month. https://www.patreon.com/Nadeem_Walayat.

My Main Analysis Schedule:

• US House Prices Trend Forecast - 50%
• Global Housing / Investing Markets - 50%
• US Dollar / British Pound Trend Forecasts - 0%
• High Risk Stocks Update - Health / Biotech Focus - 0%
• State of the Crypto Markets
• Gold and Silver Analysis - 0%
• How to Get Rich - 75%
• 

Again for immediate access to all my work do consider becoming a Patron by supporting my work for just $5 per month. https://www.patreon.com/Nadeem_Walayat.

And ensure you are subscribed to my ALWAYS FREE newsletter for my next in-depth analysis.

Your buy the DIP analyst.

By Nadeem Walayat

http://www.marketoracle.co.uk

Copyright © 2005-2023 Marketoracle.co.uk (Market Oracle Ltd). All rights reserved.

Nadeem Walayat has over 30 years experience of trading derivatives, portfolio management and analysing the financial markets, including one of few who both anticipated and Beat the 1987 Crash. Nadeem's forward looking analysis focuses on UK inflation, economy, interest rates and housing market. He is the author of five ebook's in the The Inflation Mega-Trend and Stocks Stealth Bull Market series that can be downloaded for Free.

Nadeem is the Editor of The Market Oracle, a FREE Daily Financial Markets Analysis & Forecasting online publication that presents in-depth analysis from over 1000 experienced analysts on a range of views of the probable direction of the financial markets, thus enabling our readers to arrive at an informed opinion on future market direction. http://www.marketoracle.co.uk

Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any trading losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors before engaging in any trading activities.

© 2005-2022 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.