Hello everyone! Today, I would like to introduce you to an intriguing financial concept - the Inverted Yield Curve. This is a scenario in which long-term interest rates become less than short-term interest rates. In other words, the yield decreases the farther away the maturity date is. It's also known as a negative yield curve. This phenomenon is sometimes seen as a reliable indicator of a looming recession, and it's considered one of the most trustworthy indicators of an upcoming economic downturn.
I’ve done many pairs trades where I short the 2 year and go long the 10 year at the same time, betting the spread will flatten. What do you think of this strategy right now?
I’ve done many pairs trades where I short the 2 year and go long the 10 year at the same time, betting the spread will flatten. What do you think of this strategy right now?