This an ICYMI from the folks at Bloomberg, comments on Federal Reserve and a US economic slowing
The piece is based on comments from Tony Crescenzi, market strategist and portfolio manager at Pimco, in an interview with Bloomberg TV (bolding mine):
- little-known near-term forward spread
- reflects the difference between the forward rate implied by Treasury bills six quarters from now and the current three-month yield
- fell into negative territory on Wednesday for the first time since March 2008
- "This is a crystal ball, it's telling you about the future and what the market thinks of the Fed and what it will do with its policy rate"
- "The market is predicting a rate cut at the beginning part of next year."
The piece expands further on this indicator and is well worth checking out in full, link above
