SEPTEMBER was a tough month for investors as the US stock market crashed, but the apparent cause may have baffled many as financial analysts blamed it on a mysterious force called the yield curve.
Apparently, this curve has the power to predict the future, in particular whether the economy is heading for a recession, which seems to be the case today.
So what is this oracle and how does it work? The yield curve is a simple line that plots the interest rates paid by bonds running for different periods of time, say, two, five, 10 or 30 years.
Bond yields typically follow a sloping upward curve, as short-dated bonds pay lower rates of interest, which steadily rise for bonds with a longer maturity.
In normal times, a two-year bond may yield, say, 3 per cent, a five-year bond may yield 3.4 per cent and a 10-year bond around 4 per cent. It is the same principle with fixed-rate savings bonds, an everyday savings product sold by banks and building societies. Savers would normally expect a higher rate of interest if they locked their money away for five years, rather than one or two.
This story is from the October 01, 2023 edition of Sunday Express.
Start your 7-day Magzter GOLD free trial to access thousands of curated premium stories, and 9,000+ magazines and newspapers.
Already a subscriber ? Sign In
This story is from the October 01, 2023 edition of Sunday Express.
Start your 7-day Magzter GOLD free trial to access thousands of curated premium stories, and 9,000+ magazines and newspapers.
Already a subscriber? Sign In
Armchair viewers' blank afternoon
TEMPERATURES below freezing wiped out both of the ITV fixtures yesterday leaving viewers without any live racing to watch.
Kyrgios slams Sinner and will not be silenced
NICK KYRGIOS has warned he is not going “to shut up” about Italian hero Jannik Sinner’s failed drug tests in the build-up to the Australian Open.
Will power for Sarries
TOM WILLIS surged over for two tries to give England boss Steve Borthwick another compelling reminder that his Test debut is overdue.
NOW HAAL'S WELL AGAIN AT ETIHAD
THE crisis is officially over and normal service has resumed.
NWANERI ONLY HIGH SPOT FOR GUNNERS
Lacklustre draw deals title hopes fresh blow
Stroke victim meets cops who saved her
A WOMAN who had a cardiac arrest and stroke while driving and miraculously survived has been reunited with the officers who saved her life.
Mum's cash crisis after cancer bills
A MOTHER-of-three whose mouth cancer was missed due to Covid restrictions is now facing eviction after failing to pay bills during her two years of treatment and rehabilitation.
100 'jump dock' at court despite £7m safety drive
MORE than 100 prisoners have escaped custody by jumping out of the dock during the last seven years - despite a government-funded scheme to make courts more secure.
We must teach pupils why Britain is 'Great'
ALMOST from the moment the first child crossed the threshold and entered a classroom, governments, dictators and other political leaders have sought to use education as a means of indoctrination and controlling the population.
Half a billion in pensions to dead people
BUNGLING civil servants overpaid £511.8 million in state pensions and pension credits to dead recipients, and failed to claw back £256.8m of it over the past five years.
