Why Do Long-Term Rates Go Down Below Short-Term Ratios?

In the 1981-82 recession, not only was it prolonged up until the Great Recession in 2007-2008-2009, it had been the worst economic climate since the Great Depression. The economy had stumbled. Whereas the yield curve and all of those in the markets who were trading bonds instead of short term instruments were correct in surmising both the direction, the future direction of interest rates as well as the reasons for it. It makes sense that long-term bond yields would go down because the market is expecting less growth and less inflation.

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