Economy

Inverted what? Searches for obscure financial term spike on Google

Abnormal bond market dynamic often precedes US recessions

The unusual bond market phenomenon presented itself last week for the first time in more than 12 years. Photograph: iStock

Tue Aug 20 2019 - 12:14

Searches on Google for "inverted yield curve" have spiked after the unusual bond market phenomenon presented itself last week for the first time in more than 12 years and helped tank Wall Street amid chatter that an economic downturn was imminent.

Following a tweet from US president Donald Trump referencing the "Crazy inverted yield curve!", the term made its way onto news websites and radio and television reports that rarely delve into financial topics. Even late-night TV star Stephen Colbert devoted a portion of his show this week trying to decipher what it means when the yield on 10-year US Treasury notes falls below those for two-year notes.

US web searches for “inverted yield curve” are on track in August for their highest month on record, and more than double the next highest month December 2005, according to Google’s Google Trends analysis tool.

December 2005 was the last time two-year and 10-year Treasury notes entered an inversion trend, one that would continue through 2007 and be followed by the global financial crisis and the harshest recession since the Great Depression.

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Bond yields are a main measure of the return the securities deliver to investors, and they are also a proxy for interest rates.

Google Trends provides data on the frequency of searches during a time period relative to other time periods. It does not provide actual numbers of web searches. – Reuters

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