Interest Rate Yield Curve Inversion

On today’s show we are talking about what an inverted yield curve means for real estate investors.

The yield curve is making headlines. The Wall Street Journal reports that the yield curve has not been this inverted since 1981 and 1981’s recession pushed unemployment rates even higher than the 2008 financial crisis.

A yield curve inversion happens when short term rates are higher than long term rates. This is a bit like an atmospheric inversion. In an atmospheric inversion, the temperature at the ground is lower than the temperature up in the clouds. It can happen, just not very often. It’s not natural.

Just like the atmospheric inversion, interest rates will normalize eventually. One of two things will happen. Long term rates will rise to match short term rates, or short term rates will fall to match long term rates. We don’t know what the future will bring.

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Host: Victor Menasce

email: podcast@victorjm.com