Sentences with phrase «of the yield curve does»

The lesson here is that the different parts of the yield curve do not move in lockstep, and various lending markets can behave differently over any given period.

«The short end of the yield curve doesn't act like the middle or the long end,» he says.

Active bond managers focused on the short end of the yield curve did far better than their counterparts focused on equities and other pockets of the bond markets.

I'm sorry, but with an overindebted economy, we can have a structural, not cyclical recession, where the shape of the yield curve doesn't matter much because of all the debt.

M2 Monetary velocity is still low, and the long end of the yield curve does not have yield enough priced in for additional growth and inflation.

Not exact matches

«If the Fed continues to raise rates according to our forecast and the term premium does not recover, the yield curve would invert by the end of 2019, potentially as early as June of next year,» they write in a note.

San Francisco Fed President John Williams, said the yield - curve inversion was a powerful recession indicator but didn't see signs of it happening soon, and said he backed a gradual rate increase path.

Traditionally, global equities do not peak until after the yield curve has inverted, he adds, but «given the very low - rate nature of this cycle, we'd expect a flat curve to weigh more heavily on sentiment and encourage a more defensive rotation.»

2: Moderate or flat yield curve: 10 - year Treasury yield no more than 2.5 % above 3 - month Treasury yields (this doesn't create a strong risk of recession in and of itself).

While a consolidation continues, we have vocally expected, and still do, a flattening of the yield curve.

With the exception of the very front end of the yield curve, Canadian government bond yields declined, as did spreads on investment grade corporate bonds.

If Fed liftoff does occur this fall as I expect, it's most likely to manifest in what is referred to as a flattening of the yield curve.

In doing so, investors are taking on a range of risks such as exposure to changes in the shape of the yield curve, credit spreads or exchange rates.

As usual, I don't place too much emphasis on this sort of forecast, but to the extent that I make any comments at all about the outlook for 2006, the bottom line is this: 1) we can't rule out modest potential for stock appreciation, which would require the maintenance or expansion of already high price / peak earnings multiples; 2) we also should recognize an uncomfortably large potential for market losses, particularly given that the current bull market has now outlived the median and average bull, yet at higher valuations than most bulls have achieved, a flat yield curve with rising interest rate pressures, an extended period of internal divergence as measured by breadth and other market action, and complacency at best and excessive bullishness at worst, as measured by various sentiment indicators; 3) there is a moderate but still not compelling risk of an oncoming recession, which would become more of a factor if we observe a substantial widening of credit spreads and weakness in the ISM Purchasing Managers Index in the months ahead, and; 4) there remains substantial potential for U.S. dollar weakness coupled with «unexpectedly» persistent inflation pressures, particularly if we do observe economic weakness.

Now there are times that the yield curve is inverted because we are predicting a slowdown in the economy but I don't think, you know, here we are into the eighth year of economic expansion, ninth maybe, and it doesn't really seem to be any particular reason that that economic expansion is going to die any time soon, so the traditional inverted yield curve «we're about to go into recession» I don't see.

It was done by an intern of mine who is very highly qualified and it was written in July of 2004 titled, An Investigation into the Relationship between Changes in Yield Curve and the Performance of Stock Indices.

Two years ago, Arturo Estrella, a Fed economist who has done extensive research into the predictive ability of the yield curve, was asked whether he thought the term spread still had its forecasting ability.

I do know that the FOMC has only 1 % of tightening to play with before the yield curve gets flat.

Another way to say it is that if the short end of the Treasury yield curve falls dramatically, don't expect the yields corporate debt to follow suit to anywhere near the same degree.

There will be a lot of trading noise around the news, but after the dust clears, stocks and bonds won't have done much, and the yield curve will be a little wider.

If you purchased the IEF fund in 2003 you would be speculating on the change in the 7 - 10 year section, and only the 7 - 10 year section, of the yield curve (by the way, you would have done well since bond prices move inversely to bond yields).

They have historically done this by tightening so much that the yield curve inverts and the availability of credit becomes scarce.

Index investing doesn't require studying company balance sheets, writing call options, positioning yourself on the yield curve, or any of those other things that might make active investors sound smart.

This means the government is financing itself at close to zero cost for its short term borrowing and, further out on the curve, the cost of financing does not go up by much; as the yield - to - worst on the S&P / BGCantor 7 - 10 Year U.S. Treasury Bond Index is now at 1.48 %.

Or does the steepening yield curve mean investors are worried about the deterioration in the U.S. fiscal outlook, or the potential for a collapse in the U.S. dollar as the Fed floods the world with newly minted currency as part of its quantitative easing program.

From a sector perspective, energy, materials and financials make up more than a third of the MSCI Europe Index.2 Many of these companies tend do well when inflation is rising and bond yields are rising because typically inflation nudges up commodity prices and financial companies tend to profit when the yield curve steepens.

Of course, now that the U.S. Federal Reserve has raised rates once [from 25 basis points to 50 basis points in December 2015, the first rise in seven years] and threatens to do so again, investors are staying near the short end of the yield curve, knowing that the longer you go out the bigger the capital losses should rates spike significantly higheOf course, now that the U.S. Federal Reserve has raised rates once [from 25 basis points to 50 basis points in December 2015, the first rise in seven years] and threatens to do so again, investors are staying near the short end of the yield curve, knowing that the longer you go out the bigger the capital losses should rates spike significantly higheof the yield curve, knowing that the longer you go out the bigger the capital losses should rates spike significantly higher.

That said, if we have a significant crisis because of Fed policy, it will be time to bring out the long knives and eliminate it — replace it with a gold standard, a commodity standard, or a constrained central bank not allowed to do bailouts, and constrained by yield curve slope.

The yield curve has enough slope to benefit banks that don't face a lot of credit problems... and the yield curve will steepen further from here, particularly if the expected nadir of Fed funds drops below 2 %.

Unfortunately, we don't know how much of each factor is influencing the yield curve, so we really just don't know which is the best course.

Regarding the inverted yield curve, the falling rates environment sounds logical, but it doesn't explain the early part of this decade when the yield on the ten - year went from over 6 % down to under 4 %.

Take the two variables that you are using for your yield curve slope, and do a multiple regression using either the level of the S&P, or the return on the S&P over the next six months as a dependent variable.

Depending on the shape of the prevailing SGS yield curve, there may be certain occasions where the reference SGS yields do not allow a particular Savings Bond issue to have a monotonically increasing step - up interest feature (i.e. the implied coupon rates based on the reference SGS yields may decrease over part or all of the issue's tenor).

That's part of what I would tell you to watch — if the yield curve flattens quickly, the FOMC will not do so much, most likely.

As recession probabilities dominate over medium - term horizons, so too does the magnetic attraction of the lower bound on the yield curve.

How does one describe rates and the yield curve that are either directly determined by [central banks]-LRB-[Bank of Japan] or [People's Bank of China]-RRB- or heavily influenced by them -LRB-[The] Fed or [European Central Bank]-RRB-?