For our housing loan, many of us, if you are in your 30s today and all the way to 70 years of age, will likely have chosen floating or short-term loan rates rather than longer-term loan rates. However, everything changed in 2022. Now, we are more likely to choose longer-term loan rates over floating rates. Why? Because today, longer-term loan rates are lower than floating rates.
This phenomenon is called an inverted yield curve.
In the 70s and 80s, there was also a period of inverted yields, and different markets moved accordingly as expected. Today, we are seeing an inverted yield once again, and the same markets are moving in a manner similar to those in the 70s and 80s.
We will do a comparison between the 70s and today’s inverted yield. Please let me know what opportunities you see after this tutorial.
2 Year Yield Futures Ticker: 2YY Minimum fluctuation: 0.001 Index points (1/10th basis point per annum) = $1.00
10 Year Yield Futures Ticker: 10Y Minimum fluctuation: 0.001 Index points (1/10th basis point per annum) = $1.00
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