Another Use For The Yield Curve
From Streettalk Off The Street
December 28, 2012 - 1:03pm
December 28, 2012
By: Tom McClellan - McClellan Market Report
Last week, I looked at the yield curve as modeled by the spread between the 1-year and 10-year yields on Treasury Notes. That’s not the entirety of all maturities on the entire curve, but it does give us a simple graphical representation of what the slope of the yield curve looks like. The two main points of that article were that an inverted yield curve is always bad for the stock market and for the economy, and also to note that just because the yield curve is not inverted, that does not necessarily mean that the stock market is immune to having trouble.
This week’s chart gives us a good insight as to why that is. For this week’s chart above, I have flipped around the yield spread plot so that we are looking at the 10-year yield minus the 1-year, whereas last week I showed it as the 1-year minus th...
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