Wednesday, August 31, 2011

Is The Yield Curve Telling Us Everything Will Be Ok?

Treasurys' Curve Ball: Yield Spread Hints at Growth Optimism .

Probably not. One of the side effects you get when you start messing around with free markets are all sorts of distortions. The Fed can bring short term interest rates to zero but they don't have as much influence on long term rates. This is the danger you can run into relying on indicators that sometimes are predictive.

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