Yield Curve, August 2011

The Treasury Yield Curve Data is flattening and the spread is getting smaller than ever before. Here is the data for the past year at a few points.

In a sense we are not as bad as last August but it is getting there. Now for the spread:

It is interesting to see the spread going as last August as well and the lower the spread we also see the market drop accordingly. Bu this time the drop in the spread was like falling off a cliff. There appears to be a leading indicator in spread based upon the market, or a flight to safety, with no yield.

The above is a summary of all the data. The 3 month Treasuries are in the tank as also are the 10 year Treasuries. Good for issuing new debt but bad as an indicator of any growth.

The above demonstrates the fall from peak spread, namely we are now down to almost 50% of the peak spread, which is a good measure of the flattening. Thus the long term growth outlook is quite poor.

More to come!