EOT - The Tale Of 2 Ratios: Shorter And Longer
By John R. Mousseau, CFA
In a year when we have seen commentators talking about the relative flatness of yield curves, we have a conundrum when we look at the US Treasury yield curve and the US muni yield curve (shown here as the Bloomberg AA general obligation yield curve).
Curve 1 below is from the beginning of 2017. Curve 2 is from September 2017. Curve 3 is from September of this year.
Curve 1
Source: Bloomberg
Curve 1, at the beginning of 2017, shows a very cheap muni yield curve across the board. Muni