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Watch Treasuries: When Up Is So Down

By Tim KnightBondsMar 03, 2021 03:41PM ET
www.investing.com/analysis/watch-treasuries-when-up-is-so-down-200564792
Watch Treasuries: When Up Is So Down
By Tim Knight   |  Mar 03, 2021 03:41PM ET
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US2YT=X
-0.49%
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US10Y...
-1.08%
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I find this fascinating: examine the symbol FR:T10Y2Y, the 10-year rate minus the 2-year rate. This concoction has done a crackerjack job of predicting every single recession, and the most recent is no exception. I have tinted each instance when this data point went negative, and then reversed to highlight the “V” bounce in this spread.

10-Year Treasuries Long-Term Chart.
10-Year Treasuries Long-Term Chart.

The naïve observer might think, oh, peachy keen, the badness is behind us. Not at all. The badness follows. And it isn’t here yet. But it will be. I’ve circled with green where we are now, and prior instances where we were roughly in the same place following the bounce. I have also put the years of those prior mean greenies, and every single year was an economic and market cataclysm.

A Closer Look.
A Closer Look.

 

Watch Treasuries: When Up Is So Down
 

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Watch Treasuries: When Up Is So Down

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Comments (8)
Matt Cavagrotti
Matt Cavagrotti Mar 04, 2021 3:18AM ET
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Tim, even when you're wrong I like you.
Churn NBurn
ChurnNBurn Mar 04, 2021 1:49AM ET
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Very insightful indeed, as always Tim!
CrackHead Bob
CrackHead Bob Mar 03, 2021 7:34PM ET
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your call on PTON about 2 weeks ago was spot on I loaded up on the PUTS and still have about 50% of the trade on. Thanks Tim 👍
Evan Ault
Evan Ault Mar 03, 2021 5:50PM ET
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interesting what was the date of that last dip into negative territory?
Shane Gg
Shane Gg Mar 03, 2021 4:57PM ET
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Very interesting. I've been trying to get prepared for what I know is coming.
Josh Modern
JoshModern Mar 03, 2021 4:27PM ET
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I'm ready
Jon Banjovi
Jon Banjovi Mar 03, 2021 4:09PM ET
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It's a roller coaster ride
ECL SALES
ECL SALES Mar 03, 2021 3:56PM ET
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Superb!
 
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