Treasuries Rise as Homes Sales Fall

Rolfe Winkler, CFA submits: The steep yield curve isn’t helping banks as much as you’d think. Worried that interest rates have nowhere to go but up, they’re stockpiling cash and securities while letting loans dwindle. It turns out banks won’t lend till rates rise. The trouble is, if rates rise banks may not have capital to support lending.

WASHINGTON (Reuters) - Pending sales of previously owned U.S. homes fell unexpectedly in September, a report showed on Friday, and activity may remain volatile for months as troubles with...

WASHINGTON (Reuters) - New single-family home sales dropped in March to their lowest level in four months, but the readin

Hickey and Walters (Bespoke) submit: The slope of the yield curve (difference between yields on ten-year UST vs three-month UST) and is often looked to as an indicator for the future direction of the US economy.

Kehong Wen submits: The yield spread between 10-year and 2-year Treasury notes has widened to record levels. In other words, the yield curve has never been so steep for a long long time. When it is steep, it is predicting future economic growth, usually. Could this time be different? Will it get even steeper?

Eddy Elfenbein submits: Paul Krugman has a confusing post on the steep yield curve; at least it’s confusing to me. My rule is if I can’t follow what a Nobel laureate’s saying, then it’s a pretty good bet that it’s my fault.

Kurt Brouwer submits: If you want to figure out if gold or commodities will outperform more standard assets such as stocks and bonds, then take a look at the impact interest rate environments have on gold, commodities, stocks, REITs and bonds. The starting point is the yield curve, which refers to the relationship between the yield on long-term Treasuries (such as the 10-year Treasury) versus 90-day Treasury Bills.