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The week's question
In December 2024, in the thread "Re: BRK: Why Not XOM?", BreckHutHigh asked the members: "What about the long road trips with kids?" This week it is put to everyone again. The button below opens the small thread re-asking it - read what others have said so far, then give your own answer as an ordinary reply.
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Investment Strategies / Mechanical Investing
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Author: elann ✸✹🐝🐝 HONORARY
SHREWD   😊 😞
Number: of 6131 
Subject: Re: An old monetary indicator
Date: 08/19/26 2:32 PM
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The (unsmoothed) two year rate recently crossed cleanly above the policy rate five months ago and has kept rising, so it would appear that a bullish transition will occur soon.
At stockcharts.com you can graph this as $UST2Y-$$FEDRATE

I don't understand the comment about "a bullish transition will occur soon". It appears that we've been in a bull market for a while now. The market hit a new all time high just a few days ago. So what's the transition?

This indicator naturally shows rising inflationary expectations. Not coincidentally it became positive in early March as the Iran war started and oil prices spiked. Its previous large spike was in 2022 when oil prices spiked and inflation surged following the Russian invasion of Ukraine. I guess this indicator is bullish for the market because stocks are considered an inflation hedge, until the Fed is forced to raise its policy rate.
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