October 2020 Yield Curve Update

The yield curve has taken a strong bullish move as a result of the election and the Covid-19 vaccine progress. The long end of the Eurodollar curve is nearly back to the pre-Covid level.

The date of the first-rate hike remains in mid-2021, but the escape velocity has increased significantly. Forward inflation breakevens remain level at about 1.6%, which suggests that the recent improvement has been due to real shocks. The Fed probably still has room for more traditional accommodation.


How did you like this article? Let us know so we can better customize your reading experience.


Leave a comment to automatically be entered into our contest to win a free Echo Show.