29 Mar 2019
Interest Rates: Not good news
- Posted by Dejan Pekic BCom DipFP CFP GAICD, Senior Financial Planner
The normal is for long term interest rates to be higher than short term interest rates.
The concern is when the yield curve becomes inverted (short term interest rate are higher than long term interest rates) because in the past this has marked the beginning of an economic downturn.
Today the US 3 month Treasury Bill Rate is 2.44% and the US 10 year US Treasury Bond Rate is 2.39%.
The yield curve inverted on Friday, 22nd March 2019 and if history repeats, we are now at the start of the next US recession.
Just remember that when fear and panic take hold during the next financial catastrophe, it is then that investors will be presented with the opportunity to buy more quality assets at discounted prices.
Click for Yield Curve Basics.
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