I have twitted often about the importance of the shape of the 2-10 yield curve, and there is no lack of financial and fintwit commentary on its ramifications. Rather than repeating myself over and over in “280 characters” as to why I believe it matters, here is my take with some data to back it up. But first, one paragraph to explain in what context an “inverted yield curve” (i.e. 2y Treasury yield higher than the 10y Treasury yield) does NOT matter much.
Great writeup -- it's always the liquidity transformation dependent on short-term paper that seems to get us. Any idea how much issuance you'd like to see to feel comfortable? And anywhere you'd track on bbg / elsewhere?
Very interesting. Thank you for the insights and education in to how credit markets work.
Great writeup -- it's always the liquidity transformation dependent on short-term paper that seems to get us. Any idea how much issuance you'd like to see to feel comfortable? And anywhere you'd track on bbg / elsewhere?