A steepening yield curve/spread does not need to bring on doom, as it did in 2000 and 2007. In the early 90s a steepener went with a stock market that was grinding higher (although it took a massive flattener to launch the stock bubble later that decade).
A change in the yield curve means simply… change. A change in the character of the macro backdrop to either inflationary or deflationary from what has been a long, post-2011 run of Goldilocks here in the US. Thing 1 could keep the stock market functioning okay (though it would likely under perform items more traditionally sensitive to inflation) and Thing 2 would not.
Anyway, here’s the spread this morning. It’s still on its 2019 steepening grind, which could one day turn into a macro trend. Click here to get a range of short-term and historical views.
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