Treasury Market Smells a Rat: Steepest Yield Curve Since 2017 Despite QE

[marmar]

Treasury Market Smells a Rat: Steepest Yield Curve Since 2017 Despite QE
by Wolf Richter • Jun 4, 2020 •

Market worrying about a phenomenon much worse than stagflation?
By Wolf Richter for WOLF STREET.


The 30-year Treasury yield has been rising for six days in a row, closing on Thursday at 1.61%, up from 1.41% on May 29, and up from 1.17% on April 20, and the highest since March 19, when the Fed was unleashing its multi-trillion dollar Everything Bubble Bailout.

The 20-year yield closed at 1.38%, the highest since March 4. The 10-year yield closed at 0.82%, the highest since March 26. Obviously, these yields are still in the financial repression torture basement, but the rises are showing some impatience in the market.

.....(snip).....

When a yield curve steepens, it is sometimes associated with the reaction in the market to a strong economy. And that would be a good thing. But this is the worst economy in our lifetimes, and any improvement – there will eventually be some improvement – will just make the economy a little less terrible.

Rather than seeing a strengthening economy, markets might be worrying about inflation, given all this money-printing in combination with trillions of dollars in government stimulus spending, even as the economy is in terrible shape.

Stagflation of the 1970s was a condition where the economy was in decent shape, compared to today’s economy, but just wasn’t growing much, while inflation was ballooning. Today’s economy is an unspeakable fiasco, and a big bout of inflation that would eviscerate the purchasing power of labor – of the lucky ones that still have jobs – would create a phenomenon far worse than stagflation. ...........(more)

https://wolfstreet.com/2020/06/04/treasury-market-smells-a-rat-steepest-yield-curve-since-2017-despite-qe/

[empedocles]

1. wolfstreet.com is a great site. Dealing with very important, complicated issues, in

a very knowledgeable way. Quite sophisticated comments to the thread. "smells a rat" - very telling.

[Thank you. I'm pinning this to my task bar].

[asiliveandbreathe]

2. "Smell A Rat" - of course, the pos needs a talking point..thus a presser today..

I will wait for the new Labor numbers when they are adjusted..they will be..the market is being manipulated..and most trumphumpers wouldn't know a stock from a bond...or what the hell commodities are..exception - BIG AG..

Just an FYI..I ventured out with hubby Wed. we had our masks, and went into the mall (AZ)..eerie is the word..stores have vanished..lights were dimmed on those that were open..we walked one end to other..I am not buying these numbers...