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US Treasury Yield Curve Flattens By 5 Basis Points As WTI Oil Nears $30

This is a syndicated repost published with the permission of Confounded Interest – Online Course Notes For Financial Markets. To view original, click here. Opinions herein are not those of the Wall Street Examiner or Lee Adler. Reposting does not imply endorsement. The information presented is for educational or entertainment purposes and is not individual investment advice.

The Limbo Rock for crude oil keeps going lower and lower.

West Texas Intermediate Crude (Cushing) is now at $30.28 (for the moment).

ameroil

And the US Treasury yield curve just flattened 5 basis points on near $30 crude oil.

wtiycs

If you want to use the yield curve slope as a predictor of a recession, it has historically been a predictor (see pink area). But with The Fed pumping up its balance and depressing the short-rate to near zero, the yield curve has seeming lost its predictive power.

ycoil

“I see a troubling China in the future and lower crude oil prices. But I am still going to insist on higher Fed Funds Target rates.”

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