Edit: it's only on the 3-5 year. Clarification to reduce click baitiness.
Some analysts attributed the short-end underperformance to demand for riskier assets as global trade tensions eased following this weekend’s tariff truce between U.S. President Donald Trump and China’s Xi Jinping. Others pinned it to modestly higher expectations for Fed hikes next year after the summit between the two leaders. Either way, the five-year is faring better because investors anticipate the end of the central bank’s hiking path beyond next year.
Curve flattening over the past two years has signaled investors’ concern that rising interest rates against a backdrop of slowing global growth could harm the U.S. economy. Inversion -- where yields at the short end of the curve rise above those at the long end -- has been a reliable indicator of recessions.
Emphasis mine.
Edit. Personally I'm not selling my LT holdings, so I'm not saying we are doomed or any such alarmism. I'm long term after all. But I am going to DCA any new cash, not lump sum drop it in. "Time in the market" over all :)
Thought this was a significant development on the ever flattening yield curve that would be of interest to people in this sub.
Submitted December 03, 2018 at 02:43PM by Rav99 https://ift.tt/2DXyyi1