The Trade Deficit number came in hot as has been the case more often than not. The yield curve inversion seems to be getting a little deeper and more persistent.
When the trade deficit will matter is tough to game but the curve inversion is starting to matter a lot more in its current state that it did a couple of months ago when the two year and five year inverted by 2 basis points for ten minutes.
From CNBC;
2 year 4.64%
5 year 4.53%
10 year 4.51%
30 year 4.47%
Unless this reverses quickly, I have to think that a recession by the end of the year is a real possibility. Keep in mind that nothing is certain but a truly inverted curve results in a recession 83% of the time and the usual lag is in the neighborhood of nine months.
I'd be thrilled if this go around was an exception.
Wikinvest Wire
4 comments:
Waiting for all the "It's different this time." commentary from the CNBC guests.
Since the fed delayed the recession we should have had in 2001 with the negative real interest rates, the next recession ought to be a real eye opener. They have painted themselves into a corner.
As I understand it, the Fed looks at the spread between the 3-mo. and 10-yr. to determine whether inversion exists. Their data show recessions are likely after sustained inversions > .12. They might not start easing until they see that happening. But as of yesterday, the spread was -.02. I assume they are looking at their own data here:
http://www.ustreas.gov/offices/domestic-finance/debt-management/interest-rate/yield.html
Better lay in the Absinthe package advertised in your right column, for only $260.00 you get a bottle of gold Absinthe, 100 mg thujone, plus your own Absinthe spoon.
I've always wanted an Absinthe spoon.
The thujone will help when the market dives.
OG
some great and funny comments.
to petronius, I am more concerned about people that need to borrow money being able to do it and that it is a profitable endeavor for the banks.
The Fed's definition means very little to me, more importnatly I think it means less to the markets.
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