Some More News: Sure, You Can Be a Good Guy With a Gun, as Long as You Aren't Black

Hecuba's daughter12/04/2018 12:38:31 pm PST

re: #63 uncah91

Kevin Drum explained this the other day fairly well.

Basically when the yield curves invert, it means that investors expect interest rates to fall soon, so they want to lock in the higher rates for longer.

Years ago, my husband and I were sold a bond with 8% interest as interest rates were dropping. It seemed like a great investment; unfortunately as it turned out, the bond had a provision that allowed the issuer to call it back early. So, instead of 10 years of 8% return, we had 18 months of that return.

What investors expect and what happens can diverge dramatically.