Yield Curve

The yield curve is a picture of how much interest the U.S. government has to pay to borrow money over different periods of time. These loans can vary from just a few months to several decades. Typically, the rates rise as the time horizon for repayment increases. But that is not always the case.

The yield curve is a picture of how much interest the U.S. government has to pay to borrow money over different periods of time. These loans can vary from just a few months to several decades. Typically, the rates rise as the time horizon for repayment increases. But that is not always the case.

Have you ever had someone say to you, “I’m fine” and not really believe that was the case?  If we were in a room, you’d see my hand go up.  You can often tell by the person’s tone or look that it may not be true. 

Interest rates are crucial to economic activity.  They impact the costs and therefore the incentives of financing the three pillars of the American economy: consumption, investment, and government spending.  Borrowing is done over various durations, from short to long.  Costs of loans are typically found on a menu known as a yield curve.

We all know the old saw about slowly boiling a frog.  It is a cruel idea but demonstrates how the consequences of steady, yet destructive behaviors can sneak up on us if we aren’t careful.  America has been growing its levels of debt for years.  Some have worried about the outcome while others are more sanguine.  For now, those remaining calm have been on the right sid

“Move fast and break things” was the motto Facebook founder Mark Zuckerberg created to describe the characteristic of processes he wanted implemented at the company.

At last Tuesday's Pie Party much of the discussion centered around the U.

The curvature of U.S. bond yields has attracted a lot of press of late.  Atlas has written about it in some of our blogs, and the significance of a possible inversion has frequently been a subject of discussion at our Pie Parties.  Whatever current shape the curve takes or your choice of maturity, the returns are still positive.  That's to be expected, right?