Latest / The Macro Memo with Fexingo: Daily Conversations on Inflation, GDP, and Federal Reserve Policy
Why the Fed Ignores the Yield Curve Now
Despite the S&P 500 sitting near record highs and the unemployment rate at 4.1 percent, the yield curve has inverted for months. Lucas and Luna dig into why the Federal Reserve is paying less attention to this classic recession signal than in past cycles. They break down the specific mechanics: how the Fed's balance sheet, the Treasury General Account, and the surge in Treasury issuance have distorted the term premium, and why the 10-year breakeven rate of 2.32 percent is a more reliable inflation compass right now. They also discuss the recent headlines about Treasury Secretary Bessent…
The skinny
The skinny isn't ready yet — notes appear once the transcript is processed.