If you’re a nerd, you find this amazing

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…

  1. The story going around the financial media that the stock market has already discounted a recession and…
  2. 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.

2 year treasury bond yield and 3 month T-bill yield

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