Regency Wealth Management

Andy Aran quoted in Fortune

What Is an ‘Inverted Yield Curve’? And Why Is It Being Blamed for the Dow’s 800+ Point Loss?

By Erik Sherman • August 14, 2019

Alarms were going off in the stock market today. And what pulled the cord was a slight change in the interest rates of Treasurys.

Early Wednesday morning, the interest rate on a 2-year Treasury was slightly higher than the interest on a 10-year, an event called a yield curve inversion.

By market close, the Dow industrials were off 800 points, or 3.05%. The S&P 500 was down 85.72 points, which is 2.93%. And the Nasdaq lost more than 242 points, or 3.02%.

But understanding why the yield curve has gained such importance—even Donald Trump tweeted about the CRAZY YIELD CURVE today—and whether it’s sending true or false signals at the moment, is a little complicated.

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