Wednesday, April 24, 2024

Long-Term Rates To Drop Below 2%? Cathie Wood Says 'Would Love The Fed To Pay Attention' To This Chart

Long-Term Rates To Drop Below 2%? Cathie Wood Says 'Would Love The Fed To Pay Attention' To This Chart


Ark Investment Management‘s Cathie Wood has weighed in on bond yields, which have now become one of the biggest concerns of the market.

Monetary Policy Restrictive: On the recent episode of the “In The Know With Cathie Wood” podcast aired on Saturday, Wood shared a chart of the differential between the 10-year and two-year Treasury notes, which showed a negative reading or a yield curve inversion. 

A negative reading suggests the shorter-term interest rates are higher than the long-term rates, which wasn’t normal, she said, adding that it has been more than a year since the yield curve has remained inverted.

When the yield curve inverts, it signals that the economy is either in a recession or not far from a recession, the fund manager said. 

“We would say we are in a rolling recession for the past year-and-a-half,” she added. Wood sees it as a harbinger of slower economic growth and lower inflation than most people believe.

There is a 100-basis-point or one percentage-point inversion now, similar to what was seen in the 1980s when the long-term bond ...

Full story available on Benzinga.com