For the first time since 1982, investors have been willing to accept half a percentage point per year LESS on a 10-year fixed rate government bond than on a 2-year fixed. Some interpret this as a sign of recession, while others are more focused on what these deposit rates vs borrowing costs mean for an economy that has historically relied more on borrowing than on savings. Of most direct impact for traders, an inverted yield curve has rarely lasted long, so now may be an attractive time to put on trades that would profit from any eventual “normalization” of the yield curve, whether the overall level of rates goes up or down.
In this practical webinar, seasoned bond trader Tariq Dennison explains the yield curve in plain English, what its historical patterns have been through different economic conditions, and most importantly, simple trading strategies you can do in your Interactive Brokers account with instruments like the CME Micro Yield Futures.
Disclosure: Interactive Brokers
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Disclosure: Futures Trading
Futures are not suitable for all investors. The amount you may lose may be greater than your initial investment. Before trading futures, please read the CFTC Risk Disclosure. A copy and additional information are available at ibkr.com.