More on Interest Rates
Using the Yield Curve to Estimate Interest Rates in the Future
The Financial Stress Index
Defined as the rate of difference between a 10-year treasury bond rate and a 3-month treasury bond rate, the Financial Stress Index is a useful tool in projected future economic well-being. In fact, each of the recessionary periods since 1970 have demonstrated an inverted yield curve when subjected to Financial Stress Test just prior to that recessionary period.