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Treasury auction update

Obviously what really jumps out is the steep inversion in the yield curve. Look at the difference between the 10 yr and 3 month T- bill.

3 comments

3 Comments

RWC

Jul 13, 2023

Yes, the labor market has been tight it's just amazing. Here's the latest from Fed watch on the probability of the next rate hike for July 26th. Could be the last one of this year it just depends. Rates on short term treasuries and CD's should also rise.

BigBallss

Jul 13, 2023

Replying to

I don't understand how the labor market has stayed so strong after an all out assault by the Fed. The allegations that the numbers are fake and politically driven are not supported by any of the key data points. The data says it's a healthy market and we gotta go by the data and not our feelings about a politician. No matter how hard we wish for it to be so. I think the Fed has signaled another rate hike and the markets are signaling they are cool with it. As long as the Fed doesn't surprise the markets have already baked in an increase into their models.

BigBallss

Jul 13, 2023

The three month is paying more than the ten year, what? Lol. An inverted curve for sure and historically a clear sign of a recession. Compare to June 2022 in your chart. I called a recession then, but it didn't freaking happen because the labor market kept gaining strength even as inflation gained a foothold. Illogical but it happened.

The other key recession flag is still not up: unemployment. As long as the economy stays firm we should see the 10 year fluctuate in the mid 3's to low 4's. Now if the economy weakens , especially in terms of the labor market we can see the 10 year yield get below 3%. Then it gets interesting. Jobless claims came in under expectations again today Thursday July 13 at 237,000 rather than the expected 250,000. Jobless claims need to get above 350,000 to get a serious recession worry kicked off. If that happens bad news could snowball.

Amazon just had its biggest sales day in history, how is that recessionary? 😂

Mortgage rates are trending down again after this weeks CPI report was released , they previously got up near 7.50 % for the 30 year fixed. This might be a good time to lock your rate if you are buying. Looking at this chart, it's nervous time if we get below the red line. Reach for the Xanax under 3%.