Yield Curve Flattening in the Yellen Fed Era

The video discusses the significance of yield curves, particularly the 2:10 spread, in predicting economic slowdowns and recessions. It highlights market skepticism about the Fed's rate hikes and the impact of global forces on long-term rates. Current trends show a flat yield curve with predictions of a rise in the US 10-year yield, contingent on market stability and economic performance. Expert insights from George Goncalves provide context on future challenges and the importance of upcoming central bank meetings.

What does the 2:10 spread in yield curves represent?

• The difference in yield between 2-year and 10-year bonds

• The difference in yield between 1-year and 10-year bonds

• The difference in yield between 2-year and 5-year bonds

• The difference in yield between 5-year and 10-year bonds

What typically happens when the Federal Reserve raises short-term rates?

• The yield curve steepens

• Monetary conditions tighten

• The economy speeds up

• Monetary conditions loosen

Why have long-term rates been kept low according to the discussion?

• Due to local economic policies

• Due to increased consumer spending

• Because of global forces

• As a result of high inflation

What is a potential hurdle for the US 10-year yield to rise above 2%?

• High unemployment rates

• Stock market instability

• Global economic stability

• Lack of investor interest

What needs to happen for rates to go above 2% according to the discussion?

• Decrease in global forces

• Increased global uncertainty

• Positive market sentiment and stability

• US economy underperformance