PLW - The Yield Curve - Only 17 Basis Points To Zero

• The first rate hike since 2018 is behind us, and the bond market celebrated by pressing the yield curve closer to zero. The difference between the 2-year and 10-year note is now just 17 basis points.
• Total debt in the U.S. economy stands at $88.3 trillion and GDP is about $24 trillion, so the debt-to-GDP ratio is 367%, pushing 400%. The trouble with too much debt in the system is that fewer rate hikes tend to have a bigger impact in the economy compared to a time when the economic system is less leveraged.
• The geopolitical situation, which is complicating all these market worries about inflation and interest rates, is impossible to predict other than to say that if it is resolved quickly, we will see a relief rally. If it is not resolved quickly, it will add to global inflation.

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