Friday, February 11, 2022

Yield Curves

 I thought it would be useful to see the Treasury yield curves. 

First the spread of 3 month to 10 year. It is somewhat normalized after the inversion in mid 2019. 

which one can see better below
However! The yield curve is so low given inflation that one is truly troubled. The FED seems to be trying its best to keep interest on Debt low but this is pushing inflation even higher and the death spiral with increased spending will result in a massive explosion of interest rates next year.
Remember the Carter fiscal disaster resulted in 18.5% mortgage interest rates. I had one when I moved from DC to NY. That will crush the economy for several years or worse depending who is in power. There is no Reagan on the horizon.