What is reverse yield
What is reverse yield
What is a reverse yieldThe phenomenon where interest rates on short-term bonds exceed interest rates on long-term bondsI'll point to it. This is usually the near future for market participantsWhen the economy is predicted to deteriorateIt occurs at In America, when reverse yield occurs, economic recessions have often occurred in the past, so it is regarded as an important economic indicator.
Interest rate trends on US government bonds
When interest rates on America's 2-year bonds and 10-year bonds are reversed, the market sees this as a sign of economic recession. Interest rate increases may be seen along with the Fed (American Federal Reserve) interest rate hike forecast.
Changes in the yield curve
The yield curve is usually in the form of a steady upward trend where interest rates increase as the period increases. However, when reverse yield occurs, this curve flattens or reverses.
Inflation and the Federal Reserve Policy
What is the rise in the inflation rateClosely related to rising pricesThus, the Fed is trying to curb inflation by raising interest rates. If inflation shows high growth, the Fed is likely to take a more aggressive monetary policy.
The strength of the American economy and prices
While the strength of the American economy is not strong, interest rates are being raised to respond to rising prices. What is the rise in interest rates on 2-year bondsThe market predicts interest rate hikesIt shows what you're doing.
The possibility of a recession
Based on past data, in the current financial situationEconomic recessions are likely to occurIt is supposed to be. Trends in prices and monetary policy are important indicators showing the future direction of the economy.
Inflation and monetary policy
The CPI (Consumer Price Index) is showing high growth for the first time in about 40 years,The price of things continues to riseYes, what about the marketFurther increase in inflation is expectedI'm doing it. *The inflation rate is expected to slow in the long run.
• Inflation has intensified since the beginning of 2021, and now it has reached about 8%
• Due to increased demand and economic measures,The people have a lot of moneystatus
• Due to lack of manpowerRising labor costshas led to price transfer
• Russia's invasion of UkraineFurther boosting crude oil and grain pricesIt's there
What is a reverse yieldThe phenomenon where interest rates on short-term bonds exceed interest rates on long-term bondsI'll point to it. This is usually the near future for market participantsWhen the economy is predicted to deteriorateIt occurs at In America, when reverse yield occurs, economic recessions have often occurred in the past, so it is regarded as an important economic indicator.
Interest rate trends on US government bonds
When interest rates on America's 2-year bonds and 10-year bonds are reversed, the market sees this as a sign of economic recession. Interest rate increases may be seen along with the Fed (American Federal Reserve) interest rate hike forecast.
Changes in the yield curve
The yield curve is usually in the form of a steady upward trend where interest rates increase as the period increases. However, when reverse yield occurs, this curve flattens or reverses.
Inflation and the Federal Reserve Policy
What is the rise in the inflation rateClosely related to rising pricesThus, the Fed is trying to curb inflation by raising interest rates. If inflation shows high growth, the Fed is likely to take a more aggressive monetary policy.
The strength of the American economy and prices
While the strength of the American economy is not strong, interest rates are being raised to respond to rising prices. What is the rise in interest rates on 2-year bondsThe market predicts interest rate hikesIt shows what you're doing.
The possibility of a recession
Based on past data, in the current financial situationEconomic recessions are likely to occurIt is supposed to be. Trends in prices and monetary policy are important indicators showing the future direction of the economy.
Inflation and monetary policy
The CPI (Consumer Price Index) is showing high growth for the first time in about 40 years,The price of things continues to riseYes, what about the marketFurther increase in inflation is expectedI'm doing it. *The inflation rate is expected to slow in the long run.
• Inflation has intensified since the beginning of 2021, and now it has reached about 8%
• Due to increased demand and economic measures,The people have a lot of moneystatus
• Due to lack of manpowerRising labor costshas led to price transfer
• Russia's invasion of UkraineFurther boosting crude oil and grain pricesIt's there
Based on the above factors, it is being discussed that interest rates will be raised to curb inflation
Stagflation risk
• Even if inflation is suppressed, there is a risk of “stagflation” where high prices slow down the economy. I would like to raise interest rates in order to put a stop to price increases, but due to the following dilemma, the FedSituations where it is difficult to respond due to economic measures and monetary policiesIt's:
• Even if inflation is suppressed, there is a risk of “stagflation” where high prices slow down the economy. I would like to raise interest rates in order to put a stop to price increases, but due to the following dilemma, the FedSituations where it is difficult to respond due to economic measures and monetary policiesIt's:
• Continued high inflation: The Consumer Price Index (CPI) is currently showing high growth, and the Fed needs to keep inflation in check.
• The need to raise interest rates: Raising interest rates (increasing the value of the dollar) is common in order to curb inflation, but it can curb consumption and investment and cause a recession as a result.
• Worsening employment: There is a risk that rising interest rates will increase corporate costs, leading to job cuts and wage suppression.
• In summary, the Federal ReserveBalancing the conflicting goals of controlling inflation and maintaining economic growthWe are facing a dilemma
• The need to raise interest rates: Raising interest rates (increasing the value of the dollar) is common in order to curb inflation, but it can curb consumption and investment and cause a recession as a result.
• Worsening employment: There is a risk that rising interest rates will increase corporate costs, leading to job cuts and wage suppression.
• In summary, the Federal ReserveBalancing the conflicting goals of controlling inflation and maintaining economic growthWe are facing a dilemma
Disclaimer: Community is offered by Moomoo Technologies Inc. and is for educational purposes only.
Read more
Comment
Sign in to post a comment
