On the inverting yield curve, El-Erian said it should not be “treated as a traditional signal” of a | MLPs Message Board Posts

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Msg  106406 of 106830  at  8/14/2019 9:43:34 PM  by

moneyonomics


 In response to msg 106392 by  moneyonomics
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Re: On the inverting yield curve, El-Erian said it should not be “treated as a traditional signal” of a recession, arguing that it is “distorted” by negative bond yield rates in countries abroad..others also share view

 

Does an Inverted Yield Curve Lead to a Recession?

 
 David Kass, a finance professor at the University of Maryland, cautioned that the yield curve may not be an accurate predictor of a recession under current conditions
 
 
That is not the case currently.
 
 

Kass said negative bond yields in Europe, in which investors receive nothing for their money, may be pushing investors into U.S. Treasurys.

“Foreign investors may be buying long-term U.S. Treasurys in order to earn a positive return,” Kass said. “This would exert downward pressure on the yield of long-term U.S. Treasury securities.”

 
 
 
Yellen and others also share view  trusting the yield curve inversion as the a recession indicator
 
 
 
 
 


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