230112- Relation (1) interest rate, (2) Treasury Yield, (3) oil
U.S. INTEREST RATES vs TREASURY YIELD vs OIL PRICE
Timeframe: 1 month. start: 1972
Blue line: interest rates (USINT)
Orange area: 10-year U.S. Treasury Bond Yield (IRLTLT01USM156N)
Green Line: oil (scale on the left)
(A) WHEN INTEREST RATES ARE ABOVE BOND YIELD,
(1) it sparks a financial crisis: 1990, 2000, 2008, 2019
(2) it is followed by a spike in oil price.
(3) on smaller timescale, oil price rises and falls with increases and decreases in Treasury Yields.
(B) OBSERVATIONS ON INTEREST RATE:
(1) Interest Rates have been falling since 1980
(2) Treasury Yields have been declining since 1980
(3) It appears, the Federal Reserves strives for a 5% interest rate. It drops interest rates FAST when the market is too hot, and builds up slowly again, attempting to meat the 5% arbitrary target.
(4) As time goes on the Federal Reserve is more cautious in raising interest rates.
BUT MOST RECENT RAISES IN INTEREST RATE ARE ALL BUT SLOW.
https://s3.tradingview.com/snapshots/6/67LfefHM.png
Timeframe: 1 month. start: 1972
Blue line: interest rates (USINT)
Orange area: 10-year U.S. Treasury Bond Yield (IRLTLT01USM156N)
Green Line: oil (scale on the left)
(A) WHEN INTEREST RATES ARE ABOVE BOND YIELD,
(1) it sparks a financial crisis: 1990, 2000, 2008, 2019
(2) it is followed by a spike in oil price.
(3) on smaller timescale, oil price rises and falls with increases and decreases in Treasury Yields.
(B) OBSERVATIONS ON INTEREST RATE:
(1) Interest Rates have been falling since 1980
(2) Treasury Yields have been declining since 1980
(3) It appears, the Federal Reserves strives for a 5% interest rate. It drops interest rates FAST when the market is too hot, and builds up slowly again, attempting to meat the 5% arbitrary target.
(4) As time goes on the Federal Reserve is more cautious in raising interest rates.
BUT MOST RECENT RAISES IN INTEREST RATE ARE ALL BUT SLOW.
https://s3.tradingview.com/snapshots/6/67LfefHM.png
Comment:
Notes added to chart.