GROWING UP IS hard to do but growing old is harder. As the business cycle matures and ages, it goes through phases, just as people do. These are mirrored in financial markets. Strategists like to talk in terms of early-, mid- or late-cycle investing. It is tricky to say when one stage ends and another begins, just as it is hard to delineate adulthood from adolescence. The markets drop some hints, though. The slope of the Treasury yield curve is one.

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In the first quarter, the message from the yield curve seemed clear. A steepening in its slope—a rise in long-term yields relative to short-term yields—said the economy was accelerating and inflation was coming. A lot of that steepening has since been reversed, to the surprise of many. Of the many interpretations of this change, one stands out. It says the…

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