On The Radar: What does the inversion of the yield curve mean?

The yield on short-term investments now exceeds that of longer-term interest rates for the first time since 2007.

To view this email as a web page, click here. OnTheRadar April 2019 FAQs on the Markets and Economy On the Radar is a biweekly publication providing quick and concise answers to the topical investment and economic questions that are on investors' minds. New questions in this issue: 1. What does the inversion of the yield curve mean? The yield on short-term investments now exceeds that of longer-term interest rates for the first time since 2007. Historically, an inversion is rare and noteworthy. It is often viewed as an indicator that precedes a recession and has proven to be a good one (although not perfect). 2. With the yield curve inverting, is it time to change my portfolio strategy? While the yield curve may be telling us that we are moving late into the cycle, we don't think its telling us it's time to sell risk assets. The recent inversion is certainly something to be watched, but it has not been a good indicator to use for timing changes to one's portfolio. 3. Will housing rebound in 2019? Following 2018, in which the housing market lost considerable momentum, the fundamentals are reversing direction and moving in the direction to make a more favorable environment for home buyers. 4. What's going on with Brexit? Nearly three years after the UK voted to leave the European Union, the deadline for Brexit is less than two weeks away and the British government is still scrambling to reach a consensus. 5. What did the Fed decide at their recent FOMC meting? The Fed has downgraded their expectation of economic growth and they became more dovish on interest rates. Their projection for GDP growth dropped to 2.1% from 2.3% (chart), when they last meet in December. 6. What is City National Rochdale's investment outlook for 2019? Given our positive assessment of the fundamental backdrop, we remain bullish on equities in general for 2019 and continue to see attractive prospects in the opportunistic fixed income class. Still, we believe investors should prepare for more moderate returns in the year ahead and continued volatility. Read More on CNR.com » Share this story: Follow Us Investment management services provided by City National Bank through its wholly-owned subsidiary City National Rochdale, LLC, a registered investment advisor. City National Bank Member FDIC. Investment Products are: • not insured by the FDIC. • not a deposit or other obligation of, or guaranteed by, the bank. • subject to investment risks, including possible loss of the principal amount invested. Unsubscribe from this list  |  Update email preferences This message has been sent to bank@banking.offers.report. Please do not reply to this email. To ensure the delivery of future emails, please add email@emails.cnb.com to your email address book or safe sender list. Copyright © 2019 City National Bank – All Rights Reserved. 350 South Grand Avenue, Los Angeles, CA 90071 City National Bank is a subsidiary of Royal Bank of Canada. TERMS & CONDITIONS  |  PRIVACY STATEMENT NMLSR ID# 536994 | City National Bank Member FDIC