A steepening yield curve indicates that at best, Goldilocks is nowhere to be found
There are all kinds of geniuses out there (usually with massively followed Twitter accounts) guiding us bearish or bullish, spewing dogma (and their book) and simply sloganeering without using the market’s signposts.
The yield curve is not a good timer, but we are going to use other indicators – and one in particular – along with the likes of the yield curve to plan for the end of the party, which does not yet appear in play. Garth? Wayne?
Regardless, the Goldilocks economy (and curve flattening) during the 2012-2019 boom is a thing of the past.
For now, just understand that the curve steepening is inflationary. Also understand (using the run up to Armageddon ’08) that when it was time to liquidate the party, the curve rose again under a decidedly different condition.
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