When it is cheaper to borrow long term than short term, it is a sign that the immediate risks are increasing.
This is the logic behind the well-known phenomenon of the inversion of the curve between short and long rates in the government bond market.
According to economic theory, each time this curve has inverted for the United States, it has preceded a recession.
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However, the rate for two-year American loans was 4.30% on Thursday, against 3.47% for those at ten years.
A difference of almost 0.9 points - the highest since 1981. Ditto if we take the three-month rate only, also at 4.30%.
In a "normal" situation, it is more expensive to borrow in the long term because it involves a degree of uncertainty, and therefore a greater risk premium.
The reversal means on the contrary that the situation in the short term must deteriorate before improving later.
In other words, if the model is to be believed, the United States is about to enter a recession.
Read alsoUnited States: there is “a risk” of recession, warns the Secretary of the Treasury
The indicator…
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