The Yield Curve has done its Job
The flattening of the yield curve has completed its job of forecasting weak growth. Now we expect it to be a background factor until we reach the end of the asset deflation downturn. This asset downturn has barely started. At the end we expect the 30 year yield to go under the 2 year and at that point we should be in the bottom period for asset values and a time to get out of long bond positions. We would project that bottoming period to be around 18 months in the future.