Hi everyone,
Can someone please explain to me why an increase in the T-note yield means a lower probability of recession? Thought higher yields = higher risk.
Thanks everyone
Higher yields don’t mean higher risk if it isn’t the reason.
This usually follows the notion that people invest heavily in long term notes just before recession kicks in, to lock in a high yield.
When people aren’t expecting a recession, they’ll prefer investing in stocks and selling off holdings in bonds. Selling bonds increases their yields as price falls.
This site uses cookies to help personalise content, tailor your experience and to keep you logged in if you register.
By continuing to use this site, you are consenting to our use of cookies.