Yield Curve Close to Inverting

The yield curve is almost flat. Soon, banks will not be able to borrow short and lend long and have a chance of making any money. This is why mortgage rates do not have to go to 8% to prick the housing bubble. If there is no profit margin in lending than banks should have no reason to lend, thereby cutting off liquidity to housing.


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"Treasury price gains were seen along the yield curve

The 30-year bond improved 3/16 to 115 7/16, yielding 4.36 pct versus 4.38 pct. The 2-year government note was unchanged at 99 7/8, yielding 4.07 pct versus 4.08 pct Friday

The difference in yield between the 2-year and 10-year notes remained at its tightest, only 10 basis points, or 0.1 percentage point, since early 2001"


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