I don't know if you were serious or not but ask any person who has been around through multiple cycles of any investment class - stocks, bonds, real estate, etc and almost everytime the phrase "but is is different this time" is used.
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Yield Curve: What a pathetic site
- Thread starter The Kin
- Start date
I don't know if you were serious or not but ask any person who has been around through multiple cycles of any investment class - stocks, bonds, real estate, etc and almost everytime the phrase "but is is different this time" is used.
Quote from Alizar:
How so? What makes a long-term investment have roughly the same risk as a short-term?
Can you predict the future?
Another perspective could be that the free market is pricing the long end while the government is manipulating the short end. So over the long run, market participants expect rates to stay low or go lower. Which can be translated into market participants don't see any global financial catastrophes in the future. Of course this opinion could change at any moment, and that's when you'll see long rates go up.
Has there ever been a yield curve inversion where the long end dipped below the short end? Or is it always the short end being pushed up over the long end by the fed? I believe the latter although I haven't seen the data.
Quote from futures_shark:
Another perspective could be that the free market is pricing the long end while the government is manipulating the short end.
I agree, I started thinking about that shortly after my first post. It does appear that interest rates in the US are still much higher than Europe or Japan, so perhaps that is leading more people to invest long-term in US bonds.
I am still not convinced that is what is happening, but it is about the only explanation that makes sense.