US Treasury Yield Curve – The Shutdown Analysis (Part 1)

Today we very briefly focus on the dynamics we have observed in the US Treasury Yield Curve between two critical dates:

1. The Yield Curve at 30 September 2013 – The day before the US government shutdown officially began

2. Friday 11 October 2013, exactly 11 days into the White House, Congress and Senate stand-off

What can clearly be observed from the Yield Curve for Treasury Bills (T-Bills) dated 30 days is that the spread between 30 September 2013 (at 0.10%) to the rate at 11 October 2013 (0.26%) has significantly increased and that the Yield Curve has become inverted.  Normally the sign of a recession or other financial calamity to come.

Our question:

Will Thursday 17 October 2013 be D-Day (for Disaster or Domino-day) when the whole lot starts tumbling down again?

Related articles

• Inverted Short-Term Yield Curve – Problem? (macroeconomicvolatility.wordpress.com)
• Inverted Front End of the Yield Curve – Markets Showing a possible recession? (macroeconomicvolatility.wordpress.com)
• The US needs to start encouraging saving – even if it means raising interest rates (qz.com)
• Yield Curves “Rate” your “Interest” (getdowntobusiness.typepad.com)
• Prospect for quick end to shutdown is remote (bigstory.ap.org)
• Republican Budget Brinkmanship Leads to Inverted Treasury Yield Curve (thestreet.com)
• Four Interest Rate Scenarios We Could Face (followpioneer.com)
• 1 Mo. Treasury Jumps from 10 to 27 bps in 7 days (treasury.gov)
• Yields On Short-Term US Debt That Matures Right Around The Debt Ceiling Are Blowing Out (businessinsider.com)
• US Treasury Yield Curve – The Shutdown Analysis (Part 1) (themarketsoul.com)