Recently sharing and discussing on the economic growth and the debt market yield spread impact recalled me some work I did in the past and its worth sharing,
The abstract was based on the evidence that yield spread can serve as a leading indicator of economic activity.It’s important to understand few basic concepts before moving forward:
YIELD SPREAD: The difference between yield of long-term debt and short-term debt instrument is known as yield spread. Higher the difference between instruments greater will be the yield spread.
For example, if the 05-year Treasury bond is at 3% and the 20-year Treasury bond is at 4%, the yield spread between the two debt instruments is 1% (4% – 3%). Continue reading “Economic Growth and Yield Spreads on Debt paper – Back to School”
Well this is brilliant on Saturday as a read 🙂
The Federal Reserve is awaiting
That prices may start re-inflating,
So they can foresee
Whose tapering they’ve been debating.
The Fed will not bother to taper
Its purchase of Treasury paper
‘Til the jobless rate now
And inflation allow
An end to their stimulus caper.
To avoid causing stock volatility
‘Til he can discern
A sustainable turn
To price and employment stability.