Tuesday, February 3, 2009
The circle in the lower right hand corner of this chart is small, but it's very big news. Yields on 3-mo. T-bills are rising: after hugging zero since late November through mid-January, yields are now up to 0.31%. That's still incredibly low of course, but the upward trend in the past week is unmistakable. As an astute reader pointed out the other day, Libor yields have also drifted up, but not by as much—with the result that the TED spread is now down to 91 bps, its lowest level since last June. Treasury bond yields bottomed on Dec. 30th, and are now up 80-100 bps and rising, and the Treasury yield curve is steeper. All of these are signs that animal spirits are stirring.
Posted by Scott Grannis at 8:24 AM