If The Shoe FITZ

Amber Alert

The US 2-year yield is now 130 bp's inverted to the Fed Funds rate.
 
In the last Forty years it has inverted 140 bp's or more to the Fed Funds rate before the First Fed rate cut in the cycle 3 times
 
1989- Savings and loan/ banking crisis and deep recession
 
2000- Dot Com bubble implosion
 
2007- GFC
 
That number (minus 140 bp's)  is a red alert for me (weekly close below) and increases the danger that Sept could shift to a 50 bp's move as we saw in January 2001 and 18 Sept 2007


 
 

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