2 year Treasury bond yield continues to diverge T-bills
Well, this nerd is amazed by it (and several other out of whack macro indicators), at least.
The 3 month T-bill yield (close companion to the Fed Funds rate) continues to steam upward in a divergence to the 2 year Treasury bond yield. Or put another way, the 2 year Treasury yield is negatively diverging in a signal that preceded the last two major bear markets.
The amazing thing about it is – as we’ve noted previously – that the bear market got started a year ago, well ahead of the divergence. The even more amazing thing about it is the two possible interpretations…
- The story going around the financial media that the stock market has already discounted a recession and…
- That just maybe stock market bulls ain’t seen nuthin’ yet from the bearish side.
So grab your popcorn, sit back and enjoy the show. It’s going to be a doozy in 2023.
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