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February 11, 2022 | Monday Morning Minutes

MMM Episode 52: Yield Curve Flattening as an Economic Indicator

After their market and macro reviews for the Feb. 7-11 week, Jeff Mayberry and Samuel Lau for their Topic of the Week (17:30) take a look at flattening of the U.S. Treasury yield curve as a recessionary and economic indicator. (Jeff and Sam talk about the yield curve in prior Topics of the Week in episodes 11* (nominal and real yield curves) and 24** (bear and bull flattener and steepeners).) In their deep dive, they talk about inversions, when yields of shorter parts of the curve rise higher than yields of longer parts of the curve, resulting in negative spreads. They review the three commonly tracked yield spreads and how accurately inversion of those spreads heralded the six recessions dating back to the mid-1970s (21:20). Jeff and Sam stress that they do not currently see recessionary signals in the yield curve.

Their review of the week ended Feb. 11 was shaken up Friday by rising tension between Russia and Ukraine leading to some end-of-week market shifts (1:26). Macro coverage includes discussion of sticky inflation and how expectations grow for interest rate and QT moves by the Fed (9:19). Jeff and Sam preview a pretty busy week, including PPI and retail sales numbers, and Fed meeting minutes while hoping for a peaceful and safe Super Bowl weekend (32:00).

About the Hosts

About the Hosts

  • Jeffrey Mayberry

    Macro-Asset Allocation

    Jeffrey Mayberry

    Macro-Asset Allocation

    Mr. Mayberry joined DoubleLine in 2009. He is a Portfolio Manager on DoubleLine’s strategic commodity strategy while working in portfolio management and trading for derivatives‐based and multi‐asset strategies. Mr. Mayberry is a Strategist on the Fixed Income Asset Allocation (FIAA) committee and a contributing member on our Global Asset Allocation and Macro committees. He also co-hosts DoubleLine’s weekly Monday Morning Minutes (Twitter @DLineMinutes, Minutes@Doubleline.com) podcast. Prior to DoubleLine, Mr. Mayberry was a Senior Vice President at TCW for nine years within the Mortgage Group, where he specialized in portfolio and fund monitoring and analytics. He holds a B.S. in Engineering from Harvey Mudd College and an M.S. in Financial Engineering from the Peter F. Drucker Graduate School of Management at Claremont Graduate University.

  • Samuel Lau

    Macro-Asset Allocation

    Samuel Lau

    Macro-Asset Allocation

    Mr. Lau joined DoubleLine in 2009. He is a Strategist on the Fixed Income Asset Allocation (FIAA) Committee and a contributing member on the Global Asset Allocation and Macro committees. Mr. Lau is a Portfolio Manager on DoubleLine’s strategic commodity strategy while working in portfolio management and trading for derivatives-based and multi-asset strategies, including DoubleLine's Shiller Enhanced CAPE®, Shiller Enhanced International CAPE®, Real Estate and Income, and Multi-Asset Trend strategies. He also co-hosts the Sherman Show (Twitter @ShermanShowPod, ShermanShow@Doubleline.com) and Monday Morning Minutes (Twitter @DLineMinutes, Minutes@Doubleline.com) podcasts. Prior to DoubleLine, Mr. Lau was a Vice President at TCW where he worked under Jeffrey Gundlach as a Research Analyst in the Mortgage Group. He holds a B.S. from the University of Wisconsin, Madison and an MBA from the Marshall School of Business at the University of Southern California.