, 6 tweets, 2 min read Read on Twitter
People are talking a lot about the inverted yield curve but not, I think, enough about the reason the curve inverted: the incredible plunge in long-term rates, from 3.2% last fall to just 1.45% this morning. That represents a huge shift toward economic pessimism 1/
The yield curve inversion is because the Fed hasn't followed long rates all the way down (yet); but it's the rate plunge that's telling you about economic sentiment. So what's going on? 2/
I think we have to be fair and acknowledge that it might be a bubble: people buying bonds bc others are buying bonds. But I think it's more about investors finally capitulating on the reality of Trumpism 3/
They're finally admitting that the tax cut was a fizzle, that the brief sugar high is over. And they're finally realizing that Trump is serious about trade war, and maybe just now noticing how far he's going 4/
And it's not just the bond market. Polling is starting to show public pessimism about the direction of the economy, although this isn't showing up in spending (yet) 5/
Trump had a remarkably long honeymoon on the economy. But glum reality seems to be setting in 6/
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