A Tale Of Two Curves
Bloomberg Businessweek Middle East|January 16, 2018

Some trusted economic gauges are giving out confusing readings

Peter Coy
A Tale Of Two Curves

The new year in economics will be a tale of two curves that have mysteriously gone flat—the yield curve and the Phillips curve. Some economists argue that the uncurvy curves are sending a message that the U.S. economy needs more stimulus. The debate is likely to be a prime topic at the Federal Reserve when Jerome Powell takes over as chair in February, assuming the Senate confirms his nomination as expected.

For all the attention they’re getting, though, there might be less to the two flattenings than meets the eye. Skeptics argue that the risk of recession remains low and the possibility inflation will pick up is still high. Says Jim Paulsen, chief investment strategist at Leuthold Group LLC: “I agree they are considered big stories, but I think both are overblown.”

The yield curve is about the price of money. It shows the interest rates an investor can earn on U.S. Treasuries or other bonds of different maturities, with the shortest-term instruments on the left and longest on the right. The yield curve normally tilts upward, since rates tend to be higher for longer-term bonds, because investors demand a better rate as compensation for tying up their money for a longer period of time.

Esta historia es de la edición January 16, 2018 de Bloomberg Businessweek Middle East.

Comience su prueba gratuita de Magzter GOLD de 7 días para acceder a miles de historias premium seleccionadas y a más de 9,000 revistas y periódicos.

Esta historia es de la edición January 16, 2018 de Bloomberg Businessweek Middle East.

Comience su prueba gratuita de Magzter GOLD de 7 días para acceder a miles de historias premium seleccionadas y a más de 9,000 revistas y periódicos.

MÁS HISTORIAS DE BLOOMBERG BUSINESSWEEK MIDDLE EASTVer todo
Golfing With The Enemy
Bloomberg Businessweek Middle East

Golfing With The Enemy

Did Donald Trump's executives violate the Cuban embargo?

time-read
10+ minutos  |
August 16, 2016
Super-Rich Syrians Wait for War's End
Bloomberg Businessweek Middle East

Super-Rich Syrians Wait for War's End

Actor, author, playwright. Gill Pringle tries her hand at unravelling the mystery behind this enigmatic multi-hyphenate

time-read
10+ minutos  |
July 01, 2016
Pam Codispoti
Bloomberg Businessweek Middle East

Pam Codispoti

The mastermind behind the industry-shaping Chase Sapphire Reserve Card sets her sights on banking

time-read
2 minutos  |
January 16, 2018
This Time It's The Economy
Bloomberg Businessweek Middle East

This Time It's The Economy

President Rouhani’s budget sets offprotests from people angry about unemployment and inflation

time-read
5 minutos  |
January 16, 2018
Saudi Prince Counts On Support Of Citizens
Bloomberg Businessweek Middle East

Saudi Prince Counts On Support Of Citizens

State-worker salary increases appeal to the people, but policy may throw the budget off track

time-read
3 minutos  |
January 16, 2018
Stalin's Legacy Is Choking The Ukrainian Economy
Bloomberg Businessweek Middle East

Stalin's Legacy Is Choking The Ukrainian Economy

The government has resisted pressure to lift a ban on land sales, despite pressure from the IMF and investors

time-read
4 minutos  |
January 16, 2018
Catastrophe Bonds Survive A Stormy Year
Bloomberg Businessweek Middle East

Catastrophe Bonds Survive A Stormy Year

The turbulence of 2017 couldn’t destroy a market for betting against disasters

time-read
3 minutos  |
January 16, 2018
Riding The West Bank's Credit Boom
Bloomberg Businessweek Middle East

Riding The West Bank's Credit Boom

Increased consumer lending is creating a bubble in the West Bank

time-read
3 minutos  |
January 16, 2018
You'd Be Crazy To Buy Pizza With Bitcoin
Bloomberg Businessweek Middle East

You'd Be Crazy To Buy Pizza With Bitcoin

Speculative fervour makes the cryptocurrency clumsy for commerce

time-read
3 minutos  |
January 16, 2018
What If The President Loses His Party?
Bloomberg Businessweek Middle East

What If The President Loses His Party?

Trump has to figure out a way to work with Republicans in Congress, or the global economy may be at stake

time-read
6 minutos  |
August 16, 2017