The Fed Delivers a Steep Yield Curve: A Bull's Best Friend

5/1 - "The 20 year treasury note currently yields 4.45% , the 10 year treasury note 3.8% and in contrast, the 90 day or 3 month treasury note is currently yielding 1.45%.

So the current differential between the 20 year note is 3.05% and the 10 year note 2.35%. During the mid-March 2008 market upheaval, the 20 year and 90 day treasury yield difference ballooned to 3.54%. Since the historical differential for the 20 year note is appx. 2% and the differential for the 10 year note appx. 1.35% this qualifies today’s yield curve as a steep yield curve."

"Why should you care if some esoteric fixed income construct like the yield curve is steep?...Because the yield curve has some heavy real world significance. It is a symbolic representation of how money filters through our economy and how it creates the prerequisites for economic growth.

According to the editor of the ...