Yield Signs

"My husband could get you a 10% mortgage. I'd do it myself but I'm into four other deals."
--Delores the Realtor (Wall Street)

Ten year yields have risen 20% in a month and now stand at about 1.9%. Because interest rates sometimes rise on prospects of economic strength, some view this as bullish. On the other hand, higher rates can be a wind in the face of growth.

Any any rate, the technical downtrend in place since last year's highs above 3% has clearly been neutralized by the recent strength.

Liz Sonders also observes that the recent increase in the long end of the curve coupled with a decline in the short end (primarily due to the Fed's new monetization program)--has 'uninverted' the yield curve.

Treasury curve now positively sloped across all maturities (kink is gone) @SoberLook pic.twitter.com/nVgE3C5JGs

— Liz Ann Sonders (@LizAnnSonders) November 8, 2019

Just because the yield curve has straightened out does not absolve the warning signal, however. Inverted yield curves commonly return to normal prior to recessions.