Wednesday, August 14, 2019

The 2-10 inverted this morning, first time since 2007

The long bond also hit an all time record low. Meanwhile, the economy continues to hum along with no apparent imminent dangers other than trade disputes. I can think of a few forces that are pushing down on rates, but nothing to explain the extreme crushing underway. This will change the construction of my bond ladder as the next one matures in November. There is no pay off in middle or long duration bonds, so I'll stay sheltered in the short end. This is going to hurt pension funds over time. Let's see if the 2-10 ends the day inverted.