Yield Curve Today

It may be silly to keep posting the daily Yield Curve moves, since it’s probably just a reflection of black boxes and whatever knee jerk they are programmed to do on a given day.  Today the black boxes are risk ‘OFF’ing it as the curve rises.

10, 5 & 2 year yields from Bloomberg

Why, today we have the dreaded geopolitical tensions and rate hike fears as noted by a robot in the media.  There is also a jobless claims number that was higher than expected, which you would think might counteract the rate hike fears, when taken along with the recent non-stellar jobs report.

Of course it’s all just rationalization to come up with a story every day about why the market is doing what it’s doing on that particular day.  Here is some reasoning… markets are going up.  Money is and has been pouring into them and it will continue to do so until something reverses that impulse.

The 10 vs. 2 yield curve, of which the above is a daily snapshot, has been dropping for like, forever.  Or so it seems.  That’s not a snapshot, it’s a trend and it has been good for the financial system and the stock market.  All the while ZIRP has been maintained as much of the 2014 policy tightening furor has centered on QE’s removal.  It’s all good for the market until the curve reverses trend.

Right now that trend is no systemic stress and no inflation.  The Yield Curve says so!  Meanwhile ZIIIRRRPPPP whirs along and the machine hums along.