How Much Time do we have Before the Next Economic Crisis?

  • Since early July, the 30-year US Treasury Bond Price Index has plunged 8.3%. It’s now called “the rout” in longer-dated government bonds. One of the specters is rising inflation at a time of ultra-low yields.
  • What has become the number one predictor of a bear market in stocks over the past many decades? The US Treasury yield curve. It drives bank lending – which can strangle the economy. But this time, the risks are much higher, and the potential economic consequences steeper.
  • The yield curve depicts the yields of different maturities of Treasury securities. Normally, those with short maturities have very low yields, and those with longer maturities have higher yields.
  • Here’s Christine Hughes, Chief Investment Strategist at OtterWood Capital, with a look at the yield curve, trying to determine how much longer we have until the next economic crisis.

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