12/19/2005

Inverted Yield Curve

Hello:

CNBC reports that the yield curve (interest rates on short term bonds vs. interest rates on long term bonds) has inverted today. That means that it is possible to get a higher interest rate on a shorter maturity bond.

The inverted yield curve can indicate that the market expects interest rates to decline as time moves further into the future, which in turn could mean the market expects yields of long-term bonds to decline. Some investors interpret an inverted curve as an indication that the economy will experience a slowdown in the next six to eighteen months.

We will be closing at 1:00 pm this Friday and next Friday in anticipation of the holiday weekends.

Have a safe and happy holiday!

Terri G. Millson, CIMC President

Ray Dicius, CSA, GEPC LPL Branch Manager