Talk:Economic Outlook: Difference between revisions

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#Yield curve will always be influenced by interest rate/policy expectations, thats pretty straigh forward, but what you need to understand is why those expectations exist, other the FED comunication, since the FED credibility is pretty bad at this moment. The inverted risk premium between maturities mean investors see greater risk for the economy in the short term, and hence requesting more return for the risks taken. Investors moving from short to long term bonds,  is a sign of expected distress in the economy in the near future. This is the academic explanations, and I was just using the FED research in this matter, and is the explanation given in most articles you find. But I personally, also think of the yield curve in terms of economic activity/inflation expectations. --Written by Magaly  
#Yield curve will always be influenced by interest rate/policy expectations, thats pretty straigh forward, but what you need to understand is why those expectations exist, other the FED comunication, since the FED credibility is pretty bad at this moment. The inverted risk premium between maturities mean investors see greater risk for the economy in the short term, and hence requesting more return for the risks taken. Investors moving from short to long term bonds,  is a sign of expected distress in the economy in the near future. This is the academic explanations, and I was just using the FED research in this matter, and is the explanation given in most articles you find. But I personally, also think of the yield curve in terms of economic activity/inflation expectations. --Written by Magaly  
## [[User:MagaNH6|@Magaly]] We both know that this explanation is complete bs when it comes to treasuries. There is zero risk of default. My goal for the wiki is doing our own proprietary research, focusing on the correlations we believe are strongest. If in doubt we will extensively study historical examples and correlations and using a system of logical cause-effect principles to get to a high conviction level of what is important. To me it is indeed very important to be ultra critical towards anything -no matter the source - which doesn't make sense. --[[User:PirateCaptain|PirateCaptain]] ([[User talk:PirateCaptain|talk]]) 21:25, 4 January 2023 (UTC)
## [[User:MagaNH6|@Magaly]] We both know that this explanation is complete bs when it comes to treasuries. There is zero risk of default. My goal for the wiki is doing our own proprietary research, focusing on the correlations we believe are strongest. If in doubt we will extensively study historical examples and correlations and using a system of logical cause-effect principles to get to a high conviction level of what is important. To me it is indeed very important to be ultra critical towards anything -no matter the source - which doesn't make sense. --[[User:PirateCaptain|PirateCaptain]] ([[User talk:PirateCaptain|talk]]) 21:25, 4 January 2023 (UTC)
== Wrong Correlation ==
https://www.investmentwiki.org/wiki/Economic_Outlook#:~:text=If%20investors%20see%20greater,odds%20of%20a%20recession.
[[User:MagaNH6|@Magaly]] Refering to the part above. Last sentence unclear. Overall this correlation does not exist (?) esp. since there is a reverse repo facility. --[[User:PirateCaptain|PirateCaptain]] ([[User talk:PirateCaptain|talk]]) 21:30, 4 January 2023 (UTC)