There is currently a lot of talk about interest rates. On Friday, the three-month and the 10-year treasury yields inverted for the first time since mid-2007. Some economists say this presages recessions.
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Meanwhile, remember that we have already been reporting to you that parts, if not all of Europe are contracting. Japan is contracting, China is heading south fast and we are in a definitive slowdown.
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There are currently reportedly 18 countries with negative bond yields. This is amazing in light of the fact that we are supposedly in the 10th year of a global economic expansion. It may be telling us things are worse than thought as normalized rates would mean trouble.
U.S. interest rates futures now imply a 54 percent chance of the Federal Reserve cutting rates by December. Glad they have been listening to us. We think it should be done a lot sooner … especially if rates keep heading lower on the long end.
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We can give you all kinds of stats on whether inverted yield curves lead to recession, as many market watchers are arguing for and against. Many against state the inversion needs to stay for a period of time.
Let’s just say it has a pretty darn good record and with many areas around the globe already having issues, one must question whether the U.S. will be immune.
Gary Kaltbaum is a registered investment adviser with more than 30 years of experience in the markets. He is owner and president of Kaltbaum Capital Management, a financial investment advisory firm headquartered in Orlando, Florida. He is a Fox News Channel Business Contributor regularly appearing on Fox News Channel and the Fox Business Network. Gary is the author of the book “The Investors Edge” and is also the host of a nationally syndicated radio show with the same title “Investors Edge,” which is broadcast on numerous stations across the U.S.
