The EuroDollar futures market is pricing in rate hikes as seen by the upward slope on the left, but the peak of the curve (contracts which expire in June and September of 2023) suggests that investors believe rates will reach their high and then go down after that and keep going down well into the foreseeable future.
This is an ominous sign that the Federal Reserve, and likely central banks all over the world, will be forced to abandon their current monetary policy tightening cycles and go back to near zero or zero rates once again (and likely quantitative easing of an unprecedented magnitude as well. $200B per month in treasuries?).
Bottom line, the downward slope in yield marks the approximate time of the next recession, according to the bets that are currently on the table. As always, anything can happen and opinions can change.
Buy the dip < Sell the rip
This is an ominous sign that the Federal Reserve, and likely central banks all over the world, will be forced to abandon their current monetary policy tightening cycles and go back to near zero or zero rates once again (and likely quantitative easing of an unprecedented magnitude as well. $200B per month in treasuries?).
Bottom line, the downward slope in yield marks the approximate time of the next recession, according to the bets that are currently on the table. As always, anything can happen and opinions can change.
Buy the dip < Sell the rip
Comment:
Unfortunately this chart is frozen in time because if you load new bars to bring it to the current date, it does not show the information correctly. Not sure why but it likely has something to do with my highly ameture Pine coding skills (this is an indicator that I made and I'm a rookie coder).
You must be in the arena to win the game
