{"id":15512,"date":"2017-06-26T20:46:22","date_gmt":"2017-06-27T00:46:22","guid":{"rendered":"http:\/\/goldstocksforex.com\/?p=15512"},"modified":"2017-06-26T20:46:22","modified_gmt":"2017-06-27T00:46:22","slug":"the-disconnect-between-long-term-and-short-term-rates","status":"publish","type":"post","link":"https:\/\/thepatientinvestor.com\/index.php\/2017\/06\/26\/the-disconnect-between-long-term-and-short-term-rates\/","title":{"rendered":"The disconnect between long-term and short-term rates"},"content":{"rendered":"<p>Bob Doll highlighted the disconnect between long-term and short-term rates in his <a href=\"https:\/\/goldstocksforex.com\/2017\/06\/26\/bob-doll-mid-year-assessment-of-our-ten-predictions\/\">latest review<\/a>. The chart below plots the 3-month T-bill rate against 10-year Treasury yields.<\/p>\n<p><img data-recalc-dims=\"1\" decoding=\"async\" class=\"aligncenter\" title=\"Spot Gold\/Light Crude\" alt=\"Spot Gold\/Light Crude\" src=\"https:\/\/i0.wp.com\/www.incrediblecharts.com\/images\/2017\/2017-06-27-tnx-irx.png?w=525&#038;ssl=1\" \/><\/p>\n<p>At this stage, the disconnect is not significant. But a disconnect as in 2004 &#8211; 2005 is far more serious. Large Chinese purchases of Treasuries prevented long-term rates from rising in response to Fed tightening, limiting the Fed\u2019s ability to contain the housing bubble.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Bob Doll highlighted the disconnect between long-term and short-term rates in his latest review. The chart below plots the 3-month T-bill rate against 10-year Treasury yields. At this stage, the disconnect is not significant. But a disconnect as in 2004 &#8211; 2005 is far more serious. Large Chinese purchases of Treasuries prevented long-term rates from &hellip; <\/p>\n<p class=\"link-more\"><a href=\"https:\/\/thepatientinvestor.com\/index.php\/2017\/06\/26\/the-disconnect-between-long-term-and-short-term-rates\/\" class=\"more-link\">Continue reading<span class=\"screen-reader-text\"> &#8220;The disconnect between long-term and short-term rates&#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":[31,41,34],"tags":[1039,1438,2145,3121],"class_list":["post-15512","post","type-post","status-publish","format-standard","hentry","category-the-fed-banks-interest-rates","category-china-hk","category-us-canada-countries-regions","tag-disconnect","tag-foreign-investment","tag-long-term-interest-rates","tag-short-term-interest-rates"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v27.4 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>The disconnect between long-term and short-term rates - 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=\"The disconnect between long-term and short-term rates - the patient investor\" \/>\n<meta property=\"og:description\" content=\"Bob Doll highlighted the disconnect between long-term and short-term rates in his latest review. The chart below plots the 3-month T-bill rate against 10-year Treasury yields. At this stage, the disconnect is not significant. But a disconnect as in 2004 &#8211; 2005 is far more serious. Large Chinese purchases of Treasuries prevented long-term rates from &hellip; Continue reading &quot;The disconnect between long-term and short-term rates&quot;\" \/>\n<meta property=\"og:url\" content=\"https:\/\/thepatientinvestor.com\/index.php\/2017\/06\/26\/the-disconnect-between-long-term-and-short-term-rates\/\" \/>\n<meta property=\"og:site_name\" content=\"the patient investor\" \/>\n<meta property=\"article:publisher\" content=\"https:\/\/www.facebook.com\/profile.php?id=61572934660810\" \/>\n<meta property=\"article:published_time\" content=\"2017-06-27T00:46:22+00:00\" \/>\n<meta property=\"og:image\" content=\"http:\/\/static.incrediblecharts.com\/images\/2017\/2017-06-27-tnx-irx.png\" \/>\n<meta name=\"author\" content=\"ColinTwiggs\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:label1\" content=\"Written by\" \/>\n\t<meta name=\"twitter:data1\" content=\"ColinTwiggs\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\\\/\\\/schema.org\",\"@graph\":[{\"@type\":\"Article\",\"@id\":\"https:\\\/\\\/thepatientinvestor.com\\\/index.php\\\/2017\\\/06\\\/26\\\/the-disconnect-between-long-term-and-short-term-rates\\\/#article\",\"isPartOf\":{\"@id\":\"https:\\\/\\\/thepatientinvestor.com\\\/index.php\\\/2017\\\/06\\\/26\\\/the-disconnect-between-long-term-and-short-term-rates\\\/\"},\"author\":{\"name\":\"ColinTwiggs\",\"@id\":\"https:\\\/\\\/thepatientinvestor.com\\\/#\\\/schema\\\/person\\\/cb072791ac83e8bae585007c133d54a5\"},\"headline\":\"The disconnect between long-term and short-term rates\",\"datePublished\":\"2017-06-27T00:46:22+00:00\",\"mainEntityOfPage\":{\"@id\":\"https:\\\/\\\/thepatientinvestor.com\\\/index.php\\\/2017\\\/06\\\/26\\\/the-disconnect-between-long-term-and-short-term-rates\\\/\"},\"wordCount\":76,\"commentCount\":8,\"publisher\":{\"@id\":\"https:\\\/\\\/thepatientinvestor.com\\\/#organization\"},\"image\":{\"@id\":\"https:\\\/\\\/thepatientinvestor.com\\\/index.php\\\/2017\\\/06\\\/26\\\/the-disconnect-between-long-term-and-short-term-rates\\\/#primaryimage\"},\"thumbnailUrl\":\"https:\\\/\\\/www.incrediblecharts.com\\\/images\\\/2017\\\/2017-06-27-tnx-irx.png\",\"keywords\":[\"disconnect\",\"foreign investment\",\"long-term interest rates\",\"short-term interest rates\"],\"articleSection\":[\"Banks &amp; 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The blue lines show the likely path of the index without suppression of long-term interest\u2026","rel":"","context":"In &quot;Stock Markets&quot;","block_context":{"text":"Stock Markets","link":"https:\/\/thepatientinvestor.com\/index.php\/category\/stock-markets\/"},"img":{"alt_text":"","src":"","width":0,"height":0},"classes":[]},{"id":19478,"url":"https:\/\/thepatientinvestor.com\/index.php\/2019\/11\/22\/gold-treasuries-and-chinas-yuan\/","url_meta":{"origin":15512,"position":1},"title":"Gold, Treasuries and China&#8217;s Yuan","author":"Colin Twiggs","date":"November 22, 2019","format":false,"excerpt":"China's Yuan retreated against the Dollar, encountering resistance at 14.35 US cents as the seemingly endless trade talks hit another rough patch. Breach of recent support 14.15 would warn of another test of primary support at 14 cents. Chinese purchases have weakened 10-Year Treasury yields in the last two weeks.\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":4526,"url":"https:\/\/thepatientinvestor.com\/index.php\/2012\/06\/03\/us-banks-face-squeeze\/","url_meta":{"origin":15512,"position":2},"title":"US banks face squeeze","author":"Colin Twiggs","date":"June 3, 2012","format":false,"excerpt":"Rising short-term interest rates (represented by 3-month Treasury yields on the chart below) caused negative yield differentials in 2006\/2007 which led me to warn of an economic down-turn. Yield differentials are calculated by subtracting short-term (3-month) yields from long-term (10-year) yields. Banks borrow mostly at short-term rates and lend at\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":15512,"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":24628,"url":"https:\/\/thepatientinvestor.com\/index.php\/2021\/03\/20\/short-term-rates-are-falling\/","url_meta":{"origin":15512,"position":4},"title":"Short-term rates are falling","author":"Colin Twiggs","date":"March 20, 2021","format":false,"excerpt":"Treasury is drawing on their $1.8 trillion general account (TGA) at the Fed to fund the Biden stimulus. The flood of money in financial markets is expected to boost bank reserves at the Fed by more than a trillion Dollars. The Fed may need to \"lean against the wind\" to\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":23662,"url":"https:\/\/thepatientinvestor.com\/index.php\/2021\/01\/13\/long-term-interest-rates-and-inflation\/","url_meta":{"origin":15512,"position":5},"title":"Long-term interest rates and inflation","author":"Colin Twiggs","date":"January 13, 2021","format":false,"excerpt":"iShares 20+ Year Bond ETF (TLT) breach of primary support at 155, as well as its long-term rising trendline, both warn that long-term interest rates are rising. 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