USA stares at curve in the money market.What exactly is it?

President Donald Trump after attaining the office has taken over the revamping of the economy.His policies are targeted towards the fact that Buy American and Hire American policies and it has been his foremost agenda after coming to power.


And for that he has also brought into account certain various procedures and a lot of changes in the H1-B visa rules.


How has it proved beneficial for the US economy?

The US economy is basking the glory of Trump’s administration and various policies.It is also attaining solid growth world wide.

But there is some worrying trend that economists are pointing out and is overall going to shake the economy.


What are the economists saying?


Economists are slowly eyeing a trend in the bond market which is of worrying nature and which could also spell a stormy weather ahead for the US economy as a whole.

Economists said even though TRUMP can boast of a low unemployment rate as low as 17 years the cracks in the economy can be seen or rather the curve is a taking a U shape eventually.

It is called as the yield curve and could be the harbinger of another recession warns the other economists.

In financial terms it is called as the yield curve.


According to top economists in the 1950’s depression,it was preceded over by the reversal from the yield curve and is the situation is different from now.

The yield curve is measured on the return on investment and greater the risk of losing of access and funds for a longer period of time.


The calculation is as follows-

The shorter the investment the lower the yield

The longer the investment the higher the return.


What has been the situation in the past one year?

The yield curve has been taking a flat shape and is probably an indication of the economy not performing well.

Worse the economists predict that if the curve take a flat shape it will be even more bad for the economy as a whole and will be a cause of worry for the future planning of the financial system.


The reverse could be a trend of contraction of the economy.


All is not lost yet-


While the curve has not taken an inverted shape still it is not actually away from the odds of recession showing up.

But some are also of the view that the curve may still steepen its stance and it may be well to early to predict the impending recession boom.

If such a thing happens the Fed could reverse its stance and make a change in its policy measures.


It need to be seen that there will have to be a wait and watch approach and it may be too early to say anything about the overall health of the economy.



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