Why do central banks still want to drive down long-term interest rates?
‘A Powerful Signal of Recessions’ Has Wall Street’s Attention
21–30 of 289 posts
Re: ‘A Powerful Signal of Recessions’ Has Wall Street’s Attention
#22https://www.bloomberg.com/news/articles/2018-05-14/fed-s-bul...
David Kelly from JPMorgan and Bullard, the head of the Fed Reserve of St. Louis, say the yield curve going inverted doesn't mean that much because it's being manipulated by the Fed - that means it's broken as a measuring tool (still should be watched, though)
Re: ‘A Powerful Signal of Recessions’ Has Wall Street’s Attention
#23Is there a way to see NY times articles? Hn links to NY times always brings up a pay wall.
A bit easier but also more expensive than the other options mentioned: Pay for a NY times subscription.
This is one thing I did to attempt to make a small difference in the current climate, picked a few media outlets I thought were doing a good job and paid for subscriptions. Living in very solidly blue places, nothing else I have done has likely mattered at all.
Re: ‘A Powerful Signal of Recessions’ Has Wall Street’s Attention
#24Re: ‘A Powerful Signal of Recessions’ Has Wall Street’s Attention
#25Is there a way to see NY times articles? Hn links to NY times always brings up a pay wall.
Log in via your local public or academic library -
https://www.google.com/search?q=Library+subscription+new+yor...
Re: ‘A Powerful Signal of Recessions’ Has Wall Street’s Attention
#26Earlier quoted context omitted.
What about Walgreens (with their recent replacement of GE on the DJIA)? Edit: Yep, Walgreens also not much higher vs 5 years ago. https://finance.yahoo.com/quote/WBA?p=WBA
They're down about 10% on the year: https://finance.yahoo.com/quote/WBA?p=WBA&.tsrc=fin-srch Also hadn't seen that news. Interesting.
GE long term is dead as an industrial conglomerate powerhouse, destined to be parted out. Jack Welch turned them into a bank, and then they divested the bank (now Synchrony). Very disappointing.
Re: ‘A Powerful Signal of Recessions’ Has Wall Street’s Attention
#27> The so-called yield curve is perilously close to predicting a recession — something it has done before with surprising accuracy — and it’s become a big topic on Wall Street. > The yield curve is basically the difference between interest rates on short-term United States government bonds, say, two-year Treasury notes, and long-term government bonds, like 10-year Treasury notes. > Typically, when an economy seems in…
The Fed is reducing its budget sheet which will have a significant effect on the yield curve. Inviting comparisons between the yield curve now versus any other point in history is foolish. These are probably the same people who predicted a recession when Trump was elected, after Brexit, and at least once a month for the last decade
What does that mean "reducing budget sheet?" Also, what is meant by long and short term interest? I thought the fed only set one universal interest target.
Re: ‘A Powerful Signal of Recessions’ Has Wall Street’s Attention
#28I've been hearing this for years. It'll happen when it happens and no one can actually predict.
#golong
Re: ‘A Powerful Signal of Recessions’ Has Wall Street’s Attention
#29> The so-called yield curve is perilously close to predicting a recession — something it has done before with surprising accuracy — and it’s become a big topic on Wall Street. > The yield curve is basically the difference between interest rates on short-term United States government bonds, say, two-year Treasury notes, and long-term government bonds, like 10-year Treasury notes. > Typically, when an economy seems in…
The Fed is reducing its budget sheet which will have a significant effect on the yield curve. Inviting comparisons between the yield curve now versus any other point in history is foolish. These are probably the same people who predicted a recession when Trump was elected, after Brexit, and at least once a month for the last decade
Can you elaborate more? I'm out of my area here, but it seems like it's only foolish to say that the yield curve isn't an indicator of a possible recession if we can identify a specific mechanism that typically causes both inversions and recessions, and can also determine that that mechanism is not at play here.
Otherwise, it may be that the Fed reducing its budget sheet is irrelevant, or is a factor that is only exacerbating factors that were already at play, or even, perhaps, that short term yields exceeding long term yields actually causes recessions.
Re: ‘A Powerful Signal of Recessions’ Has Wall Street’s Attention
#30https://www.bloomberg.com/news/articles/2018-05-14/fed-s-bul... David Kelly from JPMorgan and Bullard, the head of the Fed Reserve of St. Louis, say the yield curve going inverted doesn't mean that much because it's being manipulated by the Fed - that means it's broken as a measuring tool (still should be watched, though)
A Fed chairman is never going to say, "Yup, there's a recession coming": the incentives of their position don't permit it. So they will always come up with reasons why a signal with a previous 100% success rate doesn't mean much now, but in the end, it always amounts to "This time is different", aka, the four most expensive words in history.