{"id":14233,"date":"2016-09-24T19:53:38","date_gmt":"2016-09-24T23:53:38","guid":{"rendered":"http:\/\/goldstocksforex.com\/?p=14233"},"modified":"2016-09-24T19:53:38","modified_gmt":"2016-09-24T23:53:38","slug":"flattening-yield-curve-low-bank-interest-margins","status":"publish","type":"post","link":"https:\/\/thepatientinvestor.com\/index.php\/2016\/09\/24\/flattening-yield-curve-low-bank-interest-margins\/","title":{"rendered":"Flattening yield curve &#038; low bank interest margins"},"content":{"rendered":"<p>The Yield Differential, calculated by subtracting 3-month from 10-year Treasury Yields, is trending lower. This warns that the yield curve is flattening but we are still above the danger area below 1.0 percent.<\/p>\n<p><img data-recalc-dims=\"1\" decoding=\"async\" class=\"aligncenter\" title=\"Yield Differential: 10-Year minus 3-Month Yields\" alt=\"Yield Differential: 10-Year minus 3-Month Yields\" src=\"https:\/\/i0.wp.com\/www.incrediblecharts.com\/images\/2016\/2016-09-24-yielddiff.png?w=525&#038;ssl=1\" \/><\/p>\n<p>A flat yield curve squeezes bank interest margins and often precedes a credit contraction.<\/p>\n<p><img data-recalc-dims=\"1\" decoding=\"async\" class=\"aligncenter\" title=\"Large US Banks: Net Interest Margins\" alt=\"Large US Banks: Net Interest Margins\" src=\"https:\/\/i0.wp.com\/www.incrediblecharts.com\/images\/2016\/2016-09-24-netinterest.png?w=525&#038;ssl=1\" \/><\/p>\n<p>But there is little sign of slowing credit growth so far.<\/p>\n<p><img data-recalc-dims=\"1\" decoding=\"async\" class=\"aligncenter\" title=\"US Bank Loans &amp; Leases: Annual Growth\" alt=\"US Bank Loans &amp; Leases: Annual Growth\" src=\"https:\/\/i0.wp.com\/www.incrediblecharts.com\/images\/2016\/2016-09-24-credit.png?w=525&#038;ssl=1\" \/><\/p>\n<p>The St Louis Fed Financial Stress Index (STLFSI) continues to indicate low market stress.<\/p>\n<p><img data-recalc-dims=\"1\" decoding=\"async\" class=\"aligncenter\" title=\"St Louis Fed Financial Stress Index\" alt=\"St Louis Fed Financial Stress Index\" src=\"https:\/\/i0.wp.com\/www.incrediblecharts.com\/images\/2016\/2016-09-24-stlouis-stress.png?w=525&#038;ssl=1\" \/><\/p>\n<blockquote style=\"background-color:#eeeeff;\"><p>The STLFSI measures the degree of financial stress in the markets and is constructed from 18 weekly data series: seven interest rate series, six yield spreads and five other indicators. Each of these variables captures some aspect of financial stress. Accordingly, as the level of financial stress in the economy changes, the data series are likely to move together.<\/p><\/blockquote>\n","protected":false},"excerpt":{"rendered":"<p>The Yield Differential, calculated by subtracting 3-month from 10-year Treasury Yields, is trending lower. This warns that the yield curve is flattening but we are still above the danger area below 1.0 percent. A flat yield curve squeezes bank interest margins and often precedes a credit contraction. But there is little sign of slowing credit &hellip; <\/p>\n<p class=\"link-more\"><a href=\"https:\/\/thepatientinvestor.com\/index.php\/2016\/09\/24\/flattening-yield-curve-low-bank-interest-margins\/\" class=\"more-link\">Continue reading<span class=\"screen-reader-text\"> &#8220;Flattening yield curve &#038; low bank interest margins&#8221;<\/span><\/a><\/p>\n","protected":false},"author":2,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_mo_disable_npp":"","_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[31,34],"tags":[2439,3212,3553,3725,3726],"class_list":["post-14233","post","type-post","status-publish","format-standard","hentry","category-the-fed-banks-interest-rates","category-us-canada-countries-regions","tag-net-interest-margins","tag-st-louis-fed-financial-stress-index","tag-us-bank-loans-leases","tag-yield-curve","tag-yield-differential"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v27.4 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>Flattening yield curve &amp; low bank interest margins - the patient investor<\/title>\n<meta name=\"robots\" content=\"noindex, follow\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Flattening yield curve &amp; low bank interest margins - the patient investor\" \/>\n<meta property=\"og:description\" content=\"The Yield Differential, calculated by subtracting 3-month from 10-year Treasury Yields, is trending lower. This warns that the yield curve is flattening but we are still above the danger area below 1.0 percent. A flat yield curve squeezes bank interest margins and often precedes a credit contraction. 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","publisher":{"@id":"https:\/\/thepatientinvestor.com\/#organization"},"potentialAction":[{"@type":"SearchAction","target":{"@type":"EntryPoint","urlTemplate":"https:\/\/thepatientinvestor.com\/?s={search_term_string}"},"query-input":{"@type":"PropertyValueSpecification","valueRequired":true,"valueName":"search_term_string"}}],"inLanguage":"en-US"},{"@type":"Organization","@id":"https:\/\/thepatientinvestor.com\/#organization","name":"The Patient Investor Pty Ltd","url":"https:\/\/thepatientinvestor.com\/","logo":{"@type":"ImageObject","inLanguage":"en-US","@id":"https:\/\/thepatientinvestor.com\/#\/schema\/logo\/image\/","url":"https:\/\/i0.wp.com\/thepatientinvestor.com\/wp-content\/uploads\/2026\/03\/cropped-cropped-patience-bg-1-inverted-400x400-1.png?fit=250%2C250&ssl=1","contentUrl":"https:\/\/i0.wp.com\/thepatientinvestor.com\/wp-content\/uploads\/2026\/03\/cropped-cropped-patience-bg-1-inverted-400x400-1.png?fit=250%2C250&ssl=1","width":250,"height":250,"caption":"The Patient Investor Pty Ltd"},"image":{"@id":"https:\/\/thepatientinvestor.com\/#\/schema\/logo\/image\/"},"sameAs":["https:\/\/www.facebook.com\/profile.php?id=61572934660810","https:\/\/www.instagram.com\/colin_thepatientinvestor"]},{"@type":"Person","@id":"https:\/\/thepatientinvestor.com\/#\/schema\/person\/cb072791ac83e8bae585007c133d54a5","name":"ColinTwiggs","image":{"@type":"ImageObject","inLanguage":"en-US","@id":"https:\/\/secure.gravatar.com\/avatar\/876c4d990bb2af282291d5f3ff81533c6deccc0c607846086647ca3272fac0ca?s=96&d=mm&r=g","url":"https:\/\/secure.gravatar.com\/avatar\/876c4d990bb2af282291d5f3ff81533c6deccc0c607846086647ca3272fac0ca?s=96&d=mm&r=g","contentUrl":"https:\/\/secure.gravatar.com\/avatar\/876c4d990bb2af282291d5f3ff81533c6deccc0c607846086647ca3272fac0ca?s=96&d=mm&r=g","caption":"ColinTwiggs"},"url":"https:\/\/thepatientinvestor.com\/index.php\/author\/colin58s\/"}]}},"jetpack_featured_media_url":"","jetpack_sharing_enabled":true,"jetpack_shortlink":"https:\/\/wp.me\/p9tQ4n-3Hz","jetpack_likes_enabled":false,"jetpack-related-posts":[{"id":16918,"url":"https:\/\/thepatientinvestor.com\/index.php\/2018\/09\/01\/does-the-yield-curve-warn-of-a-recession\/","url_meta":{"origin":14233,"position":0},"title":"Does the yield curve warn of a recession?","author":"Colin Twiggs","date":"September 1, 2018","format":false,"excerpt":"There has been talk in recent months about the narrowing yield curve and how this warns of a coming recession, normally accompanied by a graph of the 10-year\/2-year Treasury spread which fell to 0.22% at the end of August 2018. I have always used the 10-year minus the 3-month Treasury\u2026","rel":"","context":"In &quot;Banks &amp; Interest Rates&quot;","block_context":{"text":"Banks &amp; Interest Rates","link":"https:\/\/thepatientinvestor.com\/index.php\/category\/economy\/the-fed-banks-interest-rates\/"},"img":{"alt_text":"","src":"","width":0,"height":0},"classes":[]},{"id":15298,"url":"https:\/\/thepatientinvestor.com\/index.php\/2017\/05\/18\/sell-in-may-and-run-away\/","url_meta":{"origin":14233,"position":1},"title":"Sell in May and run away?","author":"ColinTwiggs","date":"May 18, 2017","format":false,"excerpt":"Markets fell sharply today. But before we look at the charts, let's examine three fundamental measures of market stress. A yield differential near zero indicates bank margins are being squeezed. Lending normally slows, leading to a recession. But the current yield differential of 1.45%, calculated by subtracting the yield on\u2026","rel":"","context":"In &quot;Banks &amp; Interest Rates&quot;","block_context":{"text":"Banks &amp; Interest Rates","link":"https:\/\/thepatientinvestor.com\/index.php\/category\/economy\/the-fed-banks-interest-rates\/"},"img":{"alt_text":"","src":"","width":0,"height":0},"classes":[]},{"id":15621,"url":"https:\/\/thepatientinvestor.com\/index.php\/2017\/07\/21\/vix-hits-record-low\/","url_meta":{"origin":14233,"position":2},"title":"VIX hits record low","author":"ColinTwiggs","date":"July 21, 2017","format":false,"excerpt":"The CBOE Volatility Index (VIX) made a new low of 9.30 indicating record low levels of stock volatility. High levels of stock buybacks and large ETF fund inflows may both have contributed, but this is only the third time in its 27-year history that index has broken below 10%. The\u2026","rel":"","context":"In &quot;Banks &amp; Interest Rates&quot;","block_context":{"text":"Banks &amp; Interest Rates","link":"https:\/\/thepatientinvestor.com\/index.php\/category\/economy\/the-fed-banks-interest-rates\/"},"img":{"alt_text":"","src":"","width":0,"height":0},"classes":[]},{"id":18820,"url":"https:\/\/thepatientinvestor.com\/index.php\/2019\/09\/06\/interest-spreads-hold-sway-over-the-global-economy\/","url_meta":{"origin":14233,"position":3},"title":"Interest spreads hold sway over the global economy","author":"Colin Twiggs","date":"September 6, 2019","format":false,"excerpt":"An inverted yield curve is a reliable predictor of recessions but it also warns of falling bank profits. When the spread between long-term Treasury yields and short-term rates is\u00a0 below zero, net interest margins are squeezed. In a normal market, with a steep yield curve, net interest margins are wide\u2026","rel":"","context":"In &quot;Banks &amp; Interest Rates&quot;","block_context":{"text":"Banks &amp; Interest Rates","link":"https:\/\/thepatientinvestor.com\/index.php\/category\/economy\/the-fed-banks-interest-rates\/"},"img":{"alt_text":"","src":"","width":0,"height":0},"classes":[]},{"id":14843,"url":"https:\/\/thepatientinvestor.com\/index.php\/2017\/02\/18\/bond-spreads-bullish-for-us-less-so-australia\/","url_meta":{"origin":14233,"position":4},"title":"Bond spreads bullish for US, less so Australia","author":"ColinTwiggs","date":"February 18, 2017","format":false,"excerpt":"Yield Curve The yield curve is one of the best predictors of US economic recessions. Every time the yield curve has turned negative in the last fifty years, a recession has followed. First of all, what is a yield curve? It is the plot of yields on bonds, normally Treasuries,\u2026","rel":"","context":"In &quot;Banks &amp; Interest Rates&quot;","block_context":{"text":"Banks &amp; Interest Rates","link":"https:\/\/thepatientinvestor.com\/index.php\/category\/economy\/the-fed-banks-interest-rates\/"},"img":{"alt_text":"","src":"","width":0,"height":0},"classes":[]},{"id":41768,"url":"https:\/\/thepatientinvestor.com\/index.php\/2023\/04\/28\/hard-or-soft-landing\/","url_meta":{"origin":14233,"position":5},"title":"Hard or Soft Landing?","author":"Colin Twiggs","date":"April 28, 2023","format":false,"excerpt":"Almost every recession in history has been preceded by speculation that the economy is in for a \"soft landing.\" After the early warning signs, nothing much happens. The stock market keeps climbing despite rising interest rates, raising hopes of a \"lucky escape\". The four most expensive words in the English\u2026","rel":"","context":"In &quot;Banks &amp; Interest Rates&quot;","block_context":{"text":"Banks &amp; Interest Rates","link":"https:\/\/thepatientinvestor.com\/index.php\/category\/economy\/the-fed-banks-interest-rates\/"},"img":{"alt_text":"Unemployment","src":"https:\/\/i0.wp.com\/www.incrediblecharts.com\/images\/2023\/2023-04-28-u3.png?resize=350%2C200&ssl=1","width":350,"height":200,"srcset":"https:\/\/i0.wp.com\/www.incrediblecharts.com\/images\/2023\/2023-04-28-u3.png?resize=350%2C200&ssl=1 1x, https:\/\/i0.wp.com\/www.incrediblecharts.com\/images\/2023\/2023-04-28-u3.png?resize=525%2C300&ssl=1 1.5x"},"classes":[]}],"_links":{"self":[{"href":"https:\/\/thepatientinvestor.com\/index.php\/wp-json\/wp\/v2\/posts\/14233","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/thepatientinvestor.com\/index.php\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/thepatientinvestor.com\/index.php\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/thepatientinvestor.com\/index.php\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/thepatientinvestor.com\/index.php\/wp-json\/wp\/v2\/comments?post=14233"}],"version-history":[{"count":0,"href":"https:\/\/thepatientinvestor.com\/index.php\/wp-json\/wp\/v2\/posts\/14233\/revisions"}],"wp:attachment":[{"href":"https:\/\/thepatientinvestor.com\/index.php\/wp-json\/wp\/v2\/media?parent=14233"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/thepatientinvestor.com\/index.php\/wp-json\/wp\/v2\/categories?post=14233"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/thepatientinvestor.com\/index.php\/wp-json\/wp\/v2\/tags?post=14233"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}