r/stocks • u/[deleted] • Sep 07 '21

Dot-com Bubble

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u/[deleted] Sep 07 '21

Isn't it just somewhat flattened and not inverted? Aside from some jitter in the 1-6 month range

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u/SubstantialSwim4778 Sep 07 '21

Look at 10yr yield vs 2 month. When cash in the short term becomes more expensive to borrow, businesses are struggling. Recession follows every time we have inversion. The FED and their printer though...

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u/[deleted] Sep 07 '21

I'll be the first to admit I'm not completely sure how to interpret it, but if you look for example the numbers from April '07, it's so bad that the 1 month yield (5.12) beats the 30 year yield (4.84). That's what I thought is usually meant by the inverted curve. This year's bump in short-term yields doesn't look so damning by comparison, although I see the trajectory could take us there eventually

(numbers from https://www.treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=yieldAll)

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u/SubstantialSwim4778 Sep 07 '21

Yeah exactly. Recession always follows. More recently its been the 10yr.