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Why The US Treasury Yield Curve Just Could Be Signalling 1.5% Fed Funds Rates

 

Plunging Global Liquidity can explain a lot and, not least, flattening yield curves and skidding equity prices. Digging deeper, bond term premia data signal upcoming US recession and further confirm the yield curve slope’s bearish message. US interest rates have likely peaked and could fall back to test 1.5%, judging from how term premia typically perform over time. US yield curve should steepen through 2019, indicating easier liquidity conditions and paving the way for a market rebound later next year.

 

 

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