Yield Curve Fears As Treasury Yield Curve Inverts

Treasury Yield Curve Inverts

A lot of noise is being made up about the inverted yield curve and how it is signal that a recession is inevitable. First of all, remember what we have been stating all along: after 2009, everything changed. Free market forces are dead, and therefore, one cannot assume what worked in the past will continue to work going forward. Just because the treasury yield curve inverts does not mean that one has to panic and flee for the hills. In fact, due to the coming currency war's we feel the issue is being overblown.

If this were an issue, we would have addressed long ago, but in our books, this event is a non-event. The only reason it’s generating any attention is that the so-called experts are blasting the airwaves with their nonsense. Think about it for a second if no one spoke about this issue, then the masses would not care.

The same applies to the situation Britain is facing, while the situation is different, the ploy is the same. A big deal is a being made about Brexit. What we have learned is that whenever mass media makes a noise, one can expect the opposite of what they are predicting to come to pass. As they are all stating Brexit will be the ruin of Britain, it appears from a psychological perspective Brexit could mark the dawn of a new era for Britain. Now back to this inverted Yield curve rubbish

Treasury Yield Curve Inverts: All Bark & No Bite

In the past, when the yield curve inverted, the Fed did not ease up on its aggressive rate-hiking stance. The current Fed has no choice but to lower rates. So the Fed is going to likely end the yield inversion sooner or later by lowering rates

Secondly, even if the curve has inverted, it takes an average of 21 months to trigger a recession that is like a lifetime in the markets.

Sweden is proving that we are in a new era, rates are already negative there, but they have still averted a recession.

At the Tactical Investor, we focus on the trend so we could care less what the mass media thinks about the future of the economy. History indicates that the experts and mass media collectively have the IQ of a Jackass, and if one is wise one will never start a debate with an ass. Today’s News, as we have stated for a long time, falls under the category of gossip.

So our take is this, forget the noise and focus on the trend.