Why That’s Bad News for Economic Growth and Inflation
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Financial news has been rife with updates on the Treasury yield curve inverting between 20 and 30 years last Thursday — but what does that mean, and how could it affects you?
The U.S. Treasury Department finances the federal government debt (commonly referred to as “obligations”) by issuing its own various forms of debt. This means Treasury bonds, and the $14.8 trillion Treasury “market” include everything from T-bills, T-notes and 20- and 30-year bonds.
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Investors of all kinds can purchase these instruments, and each has its own function. T-bills, or Treasury bills, have expirations from one month up to a year. Treasury notes, T-notes, have expirations from 2-10 years and Treasury bonds have maturities of 20 or 30 years.
The “yield curve” plots the yield of all of these Treasury securities, and…
