Do 0% US Treasury Yields Lie Ahead? Buy Bond Convexity: Renewed US Slowdown Fears

The Yield Curve Warns Of US Recession, But Is The Term Structure Now Confirming It?

 

•      Flattening Yield Curve has been warning about a slower US economy for months

•      Track-record of yield curve predictions is poor, but the US economy does now appear to be slowing

•      Pattern of term premia (D-star) proves a far better predictor of US business cycle

•      The skew in Treasury term premia warns of US manufacturing recession by mid-2019

•      Investors need to add convexity to portfolios for protection