US Swap Spreads Widening And Curve Downward Sloping And INVERTED Beyond 20 Years

While the US Treasury yield curve has yet to invert (slope < 0), the US Dollars Swaps curve has inverted with spreads greater than 20 years going negative.

(Bloomberg) — Dollar swap spreads curve steepens as buyers of long-end Treasuries emerge, pushing 5s30s to fresh session lows; move has extended widening in long-end spreads, which initially started during early Treasuries selloff.

Hedge fund demand seen in long end of the Treasuries curve, New York-based trader says; 30-year yields topped during morning session at 3.242% but remained inside Wednesday’s high

Demand in long end has tightened 5s30s curve by ~0.6bp on the day

USD 30-year swap spreads wider by 1.1bp, reversing tightening seen in prior two sessions; spreads started to widen amid early Treasuries selloff, pointing to paying flows extending the move lower, as USZ8 bottomed at 139-24

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Dollar swap spreads curve is downward sloping and INVERTED beyond 20 years.

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Fed Chair Powell’s reaction?

jpmorgan

Alarm! Core Inflation Cools To 2.2% YoY, Rent Inflation Cools To 3.3% YoY (GINI Index Keeps Rising)

Despite the predictions of rising inflation, core inflation (CPI YoY less energy and food) cooled to 2.2%.

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And rent inflation cooled to 3.3% YoY.

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Gold prices rose on the lower core inflation report.

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Meanwhile, the GINI index of income inequality keeps on rising.

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According to the Taylor Rule, The Fed still needs to raise their target rate to 7.54%.

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The Federal Reserve didn’t see that coming!

jpmorgan