The most important chart in the world!

Just kidding. It’s a reference to some gold bug man staring at a gold chart…

…many years ago, labeling it “the most important chart in the world”. Some things just stick with me.

2 year Treasury bond yield is important across the macro

Yes, it is very important because it has been a primary guide for the Fed to get (tardy though they were) and remain hawkish. It is also a component of the 10yr-2yr yield curve, which will very likely start to steepen when the 2 year Treasury yield starts to drop. While (in my opinion) the initial stages of a yield curve steepener can be perceived as positive by markets, as it matures it will bring havoc, whether inflationary or deflationary.

But for now, let’s keep it simple. The 2 year Treasury bond yield, in failing to recover its 50 day moving average, is very vulnerable. That vulnerability is in consideration of a slowly easing economy and less slowly fading inflation signals.

2 year Treasury bond yield

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