U.S. interest rate difference between long-term and short-term government bonds

U.S. interest rate difference between long-term and short-term government bonds
- Economic indicators to be noted

 It has been about three months since interest rates on 10-year and 3-year government bonds reversed.
 The recent reversal of interest rates on 10-year and 2-year government bonds has led to a large drop in U.S. stock prices.
 Therefore, concerns are mounting over whether "R's Fear" is coming.

 A reversal in the short- and long-term rate gap would lead banks to poor profitability, and they are highly likely to go into recession.
  The difference between the two-year and 10-year government bond rates is known to reflect the economic downturn more.

 Corporate profits in the United States usually mean EPS ( Earnings Per Share).
 The U.S. National Statistical Office (NSO) is releasing an indicator of total corporate profits, including all non-listed companies.  
 For the second straight quarter, the index has been on a decline.

 A reduction in total corporate profits would reverse the long-term and short-term interest rate gap.
 As the economy has slowed recently, the bond market has no choice but to reflect this.
 As a result, the short- and long-term interest rate gap may widen.

 When looking at economic indicators or price indicators, the level, direction and speed should be seen.
 The direction of U.S. corporate profits is down, and the level is down slightly from the highest point in history.

 For interest rates, total corporate profits are high in history, so there is no need for low interest rates.
 However, since the direction is going downwards, the total corporate profits are likely to go down rather than back up in the future. ​
 (This indicator often lasts 3 to 8 years when direction changes.)

 At the beginning of the short- and long-term rate gap, the stock market will be good and the bond market will be strong. (Current Situation)
 However, if the phenomenon is accumulated, the economy will suffer even worse as banks' health will deteriorate.

 Korea's total corporate profits are announced by the Bank of Korea (BOK) and represent a significant portion of the leading companies (Samsung, Hyundai and others).
 Therefore, there is no significant difference between total corporate profits and EPS in the stock market.
 (In the case of the United States, we see direction. )