Fed Needs to Focus on the Treasury Yield Curve

Brandywine Global portfolio manager Jack McIntyre was on Fox News to discuss and provide market insight as to why the Federal Reserve should focus on the flattening Treasury yield curve.

Related: 4 Corporate Bond ETFs Showing Signs of Interest

Points discussed:

  • Flattening yield curves could invert, causing the 2-year yields to be higher than 10-year yields – a condition that typically precedes a recession
  • The inverted yield curves preceding a recession were evident in the Dot Com Bubble and the Housing Bubble the past 30 years
  • The current yield curve is telling two things: Inflation is not a concern and growth should be watched carefully
  • Flattening yield curve points signals Fed to slow down on raising interest rates
  • Investment opportunities could be had in long end of the yield curve
  • Opportunities: 30-year U.S. treasuries, Japanese government bonds, contrarian emerging markets bonds, and Latin American/Asian commodity producers

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