With how well the stock market and economy have been performing lately, despite Brexit and Trade War concerns, the bond market continues to perform in concerning ways. You would think that a delayed Brexit (and vastly reduced risk of a no-deal Brexit) would have fixed the yield curve a bit, but it did not. In some cases, bonds are getting "worse".
The Fed has signaled that they're not cutting rates this calendar year. In fact, they said inflation would increase and our currently low inflation is only due to a couple of lagging sectors. Transient inflation is what they called it, I believe. I haven't gone back to reread the report, so please correct me if I'm wrong here.
The bond market, being much more massive than the stock market, is pricing in either volatility or lower rates. What gives? The 3m/5y curve, while not super indicative of impending recession, is still an important indicator.
Submitted May 10, 2019 at 03:43PM by lulzcakes http://bit.ly/2WAx3Nl
