Fisher Investments Founder, Ken Fisher, Discusses The Yield Curve
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- Опубліковано 29 вер 2022
- Fisher Investments’ founder, Executive Chairman and Co-Chief Investment Officer Ken Fisher shares his thoughts on yield curves (the difference between short- and long-term interest rates), which investors use as a rough proxy to assess financial credit conditions. According to Ken, the 10-year to 3-month US yield curve has historically been a reliable leading economic indicator. However, given today’s global banking system is more interconnected than ever, Ken suggests the global yield curve is a better indicator of broad economic conditions.
With the recent flattening of the US yield curve, many investors and pundits fear an inverted yield curve (when short-term rates exceed long-term rates) might signal impending economic recession. However, Ken believes today’s globalized banking system means one country’s yield curve only tells a small part of the economic story since money can be lent across the globe in near instant transactions. While the global yield curve has narrowed this year, it has remained positive-indicating an overall healthy lending environment, which is a driver of continued economic growth. The fear of a flatter US curve, therefore, may be misplaced.
For more of Ken Fisher and Fisher Investments’ thoughts on the markets, visit us at www.fisherinvestments.com/en-us.
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Investing in securities involves a risk of loss. Past performance is never a guarantee of future returns. Investing in foreign stock markets involves additional risks, such as the risk of currency fluctuations. The foregoing constitutes the general views of Fisher Investments and should not be regarded as personalized investment advice. Nothing herein is intended to be a recommendation. The opinions expressed are subject to change without notice.
Sounds like he’s saying “it’s different this time”.
I am a college student, your video is so valuable. Thank you.
It's well written in the book "Beat the Stock Market" with three questions. Thank you, Ken Fisher.
Nice vid Kirk
Your just making me SMARTER!!! I could have read Wikipedia for years and never have gotten that take n the yield curve.
Thank you. Another lesson so durable and fundamental that I am going to share it with my child.
Thank you, another great lesson I’m going to share with my son. Your perspective and descriptions help calm a lot of fears.
Great video! I was not aware of the exact numbers, however I am not surprised that today banks are only paying for 6% of the funds they loan out, compared with 70% (then say 20 yrs ago) You could also point out that the Fed has been creating the inversion of the yield curve. They have been conducting QT in the short end and QE in longer dates securities like MBS. Until yesterday the Fed has been a net buyer of MBS since June 2nd. 4+ months into their imaginary QT of the MBS market they should have let 96.25 bln roll-off and yesterday we saw their first reduction of 9 bln.
Great info...
what's intriguing about this video is that it's the fact either 10yr-2yr or 10yr-3m spread predicted it bubble, financial crisis and even pandemic yet, mr. fisher calls this time's different while the curves get deepening this year.
Thank you Mr.FISHER
Thank you for sharing❤
Great insight.
He has a good point. Banks don't pay for deposit these days. But he missed the signaling effect of the yield curve. Bond market is dominated by big investors whose expectation about the economy is reflected in the yield curve. And currently, that signal is flashing red.
While most of deposits are free to banks One major concern of mine is that they have also became fickle since due to technology its very easy to shift deposits between institutions at very low cost to the depositor. Banks May very well have to offer high interest rates to keep the deposits on the books. I already see it happening in the market.
The higher short terms rates had also pushed up the mortgage rates this causes the monthly payments of borrowers to be higher and affordability lower so banks which are using affordability ratios to lend might hit the breaks. If they hit the breaks on business loans that might cause recession even if the global yield curves are not inverted.
I find your explanation about borrowing at low rate abroad and investing in USA very plausible to explain the strength of the dollar I learned something new so thank you.
what's intriguing about this video is that it's the fact either 10yr-2yr or 10yr-3m spread predicted it bubble, financial crisis and even pandemic and mr. fisher calls this time's different while the curves get deepening this year.
Banks are starting to pay fairly high interest rates on deposits. And the "regular" yield curve is still inverted. What is your current view on the yield curve?
US yield curve, FED, PMI's... are important but not so crucial as people think. Economy and monetary system are complex, flexible and interconnected. And more importantly evolve. It's far more important to understand the consequences of what is happening ( pandemic restrictions, fiscal stimulus, policies,...) than look for "historical" clues.
Euro Dollar curve has been inverted for some time , sound like someone talking their book. Gig is up recession is coming and this time there is no Fed Put.
Wise person.
Greattt
So where is all this money the banks are flush with coming from? US quantitative easing or other source?
Stock sales, as the market has crashed this year
Good-health banks can make money out of thin air when they make loans. The money they put in the deposit is simply the other side of the balance sheet of the loan. QE is more about the good health of the banks.
Everyone pull their money out of bank accounts.
Easy solution
Yeah, we get rid off the banking system and then we come back to the barter. 🤣 It's no gonna happen!
The Nation that sponsored the Marshall Plan seems to be long gone?
The US that attempted to use Gunboat Diplomacy and name it after the USS Maddox, seems to have less punch left, as the effort to secure Pacific Rim Colonies begins to cost more than it did in 1969?
The US Navy might eliminate Competing Fuel Providers simply to promote profits to Investors in the US, but they might be facing some more effective opposition as the effort to promote US presence in the Pacific, appears to have little industrial support to back that part of the US Empire?
Like the Romans who promoted the objectives of protecting the identity of Investors, the current US Empire seems to demonstrate a different Aura than the one Japan faced after sinking the Russian Fleet?
The US Economy depending on an Empire to support the exploitation of weaker nations to feed the greed has directed the US to that fateful area of dirt, where Soldiers have died to promote profits, as Tennyson immortalized in poems after the Half Million Poor Boys died between Balaclava and Sevastopol in 1850's......
The Romain, and Nazi guys who died there later seemed similar to Persians and Vikings who clashed around that Appendix of the region?
Economy seems to provide Poet's with Purpose?