Bond Report: Treasurys wrap 2005 with gain, inverted yield curve - Banks - Financial - Financial Services - Bond Market - Currencies - Economy

Bond Report: Treasurys wrap 2005 with gain, inverted yield curve - Banks - Financial - Financial Services - Bond Market - Currencies - Economy: "Dec. 30, 2005
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CHICAGO (MarketWatch) - Longer-term Treasurys moved in two directions in a shortened trading session on Friday, pinning their yields below short-term yields this week for the first time since 2000.
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These yields bookend the heart of the so-called yield curve, the graph line that plots the range of yields from shortest to longest maturity. It inverted on Tuesday for the first time in nearly six years invigorating the debate over its accuracy as a harbinger of economic downturn, even recession.
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"We continue to interpret this type of move as an indication of slower economic growth. The historical record speaks for itself. In the past 30 years, the yield curve has inverted five out of the eight times the Fed has been tightening monetary policy," he wrote in a commentary. "Each of those five times an economic recession has ensued one year later - our fear ... is that this time will be no different."
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