Another helpful Whiteboard session from Paddy Hirsch, this time on the now flattened short end of the yield curve and what the Federal Reserve is doing to try to spur growth in the economy:
Due to this flattening and lowering of the short end of the yield curve, investors who are looking for yield income are having a hard time finding it in many of the traditional sources. Our Chief Investment Officer Raphael Mennicken addresses some of the high-yielding alternatives Covestor offers in this post: Looking for Yield? 4 Covestor models to consider in September, 2011.
Update: Note that Hirsch is comparing early 2005 to September 2011 – as 2005 progressed, the yield curve flattened out considerably. Also, note that while the current short end of the yield curve is quite flat, the entire yield curve is historically very steep – it rises sharply after the 3 year point. You can do historical comparisons of the yield curve on your own on the Treasury’s site.
Sources:
“What is the yield curve?” Marketplace Whiteboard 9/12/11 https://vimeo.com/28849495
US Department of the Treasury, Historical Yield Curve
