By Matt Phillips With all the chatter on the Treasury bond yields of late, we we thought we’d spotlight a couple cool visualizations of the yield curve. This one was posted by Zero Hedge blogger Tyler Durden. It gives you as good sense of not just the movements of rates, but also how the Fed has been able to sit on the short end of the curve in an attempt to drive investors out into riskier assets. (The idea, of course, is that a steeper yield curve will help get the economy rolling.) While we’re on the subject of the yield curve, The Journal’s Kelly Evans has a good “Ahead of the Tape” Monday, pointing out that the yield curve still doesn’t look like it portends a double dip. She also has a good plain speak explainer on how to think about the yield curve. Evans writes: Essentially the difference between long-term and short-term U.S. government-debt yields, the yield curve is a powerful harbinger of recessions and recoveries. Nearly every time the yield on short-term debt has surpassed the yield on long-term debt — known as an “inversion” — a recession has followed. Meanwhile, a “steep” yield curve, when long-term rates are much higher than short-term ones, usually augurs strong economic growth. Back in February, the difference in yields on the 10-year and two-year Treasury notes hit 2.929 percentage points — a record high. That also helped fuel the V-shaped rebound in the Conference Board’s index of leading economic indicators. Little wonder investors felt good about recovery prospects at the time. The yield curve has since flattened, but at about 2.16 percentage points it remains pretty steep by historical standards. That is a key reason why many economists still see a fairly small chance of a “double dip.” Oh, and if you’re looking for a more animated depiction of the yield curve, check out this one from Johns Hopkins economics prof Jonathan Wright. « Previous Hmmm. Greek Spreads Jumping a Bit Next » Markets Hub: Lowe’s Highlights Consumer Woes MarketBeat HOME PAGEEmailPrinter Friendly Share:Yahoo! Buzz facebook MySpace Digg LinkedIn del.icio.us NewsVine StumbleUpon Mixx Add a Comment Error message Name We welcome thoughtful comments from readers. Please comply with our guidelines. Our blogs do not require the use of your real name. .Comment . . Comments (5 of 10)View all Comments ». 4:38 pm August 16, 2010 The Undertaker wrote: .I am the yield curve. Drop in anytime! . 2:10 pm August 16, 2010 Anonymous wrote: .The first link doesn’t work. And the errors others pointed out (first at 11:51 a.m.) have still not been corrected . 1:38 pm August 16, 2010 richjoy wrote: .I note the article failed to mention the symbols for the 2 and 10 yr. yield; the 10 yr is ^TNX, can anyone provide the symbol for the 2 yr? . 1:30 pm August 16, 2010 Steve wrote: .Even in engineering school “will get the economy will help get the economy rolling.” is a minus 5. If you are going to write for a living, ask someone to do some editing for you. These kinds of errors are in your paper all of the time! . 1:29 pm August 16, 2010 GlobalOptima wrote: .The reason you typically get an inverted yield curve before a recession is that the inversion results primarily from the Fed pushing UP the short end of the curve in response to inflationary pressures. The Fed is now pushing rates DOWN to zero in order to keep the patient on life support. So the shape of the yield curve doesn’t tell you much here, as BTN also pointed out. In the current de-leveraging environment, the absolute level of the 10 year is a better indicator of the market’s outlook for the economy .
