. He pointed to the narrowing inversion in the yields from 2-year and 10-year Treasuries, noting the gap between them has shrunk from 107 basis points to 40 in recent weeks.
The fixed-income specialist also noted that yields on 2-year Treasuries and longer-dated government bonds are now well below the current fed funds rate. Bond yields signal investors' expectations for growth, inflation, and interest rates in the months and years ahead.that the Fed will cut rates significantly in the near future. It has hiked them from nearly zero to their highest level since 2007 over the past 12 months, in response to inflation hitting a 40-year high.
The central bank is betting that higher rates will make borrowing more costly and encourage saving over spending, cooling price growth. However, they also pull down asset prices and temper demand, increasing the risk of markets crashing and the economy tanking.against hiking rates to 4.5% or higher. He feared that would crimp lending and overwhelm the heavily indebted US economy — especially when it already faced growth headwinds including the Russia-Ukraine war and the European energy crisis.
Dec 17, 2022 burrytracker 'Blackrock: “Get ready for a recession unlike any other” Buckle 🆙'