Federal Reserve Chairman Alan Greenspan announced in Congressional Testimony today that the "yield curve was no longer a useful gauge of the economy."
Greenspan also downplayed the risk of big foreign holders of US Debt.
In related news, the Onion reported that upon retirement, Greenspan will be joining the Conference Board, where he would be placed in charge of the Leading Economic Indicators.
Rumor has it he said “It’s different this time” also, but we’re still trying to find it in the statement.
Inversion? What inversion?
Thanks for the links.
Grace be with you………..
man, Greenie gonna put the boys of ECRI out of business w/ all that stuff. lol
talk about “no longer useful”. g’bye alan!
Greenspan is right concerning the yield curve. This is a unique phenomenon of our central bank’s restraint being over-ridden by Asian central banks & other foreigners buying our 10-yr notes.
I didn’t find that quotation in the text of Greenspan’s testimony (at least not at the URL provided). Is there some other source, or were you paraphrasing?
He pretty clearly implies that the yield curve needs to be interpreted differently because of the impact of globalization on expected future inflation, but “no longer useful” seems a bit beyond his meaning.
This is what I call Greenspan’s pep talk.
Don’t worry. [Because he does.]
But umpteen 25bp increments later, it sinks in: I could’ve raised 50bp maybe even 75. Now, as the spread is moving, but maybe still contracting, is the time to blow the horn: “I’m not afraid of any ole yield curve invertion. I’m not.”
Sorta.
Why do I always lose when someone says “Its different this time”?