By now, you have probably heard that the yield curve has got flatten and will likely invert in 2019. What does this mean? Specifically, economists and investors look at the yield of the 10 year treasury note and subtract that rate from that of the 2 year treasury note. Rationally, investors want higher rates for […]
The economists and central bankers of the US Federal Reserve have a perplexing challenge. The US economy has picked up in terms of GDP growth, but inflation is below the Goldilocks target of 2%. How could economic models be wrong? What, if anything, has changed? It has spurred a serious discussion that suggests that US economy operates differently now. I think the answer is obvious – DEFLATION! We have deflation, just not in an absolute form. We have deflation in the economy like you might have bugs in your house. They are not everywhere, just in places. Overall, the house is mostly clean, but there are some bugs.
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