The US Treasury issued a new plan this month that would increase the share of shorter-term debt and decrease longer term debt.
This is remarkable. One would think with interest rates at historic lows the plan would be to continue pushing out debt obligations. This is what the treasury has been doing since 2009.
Besides bad debt management it also risk pushing the yield curve negative.
Shaded areas indicate rescission. Every time the yield goes negative a recession is not far behind. This is logical. Banks borrow short and lend long. When the yield curve goes negative, it is no longer profitable for banks to do this and their loan portfolios stop expanding.
As I have stated in a previous post the greatest bull runs happen just as the yield curve begins to compress. However this policy could push the yield curve negative fast depending on how they execute it.