An inverted yield curve reinforces the decline in money supply, bank credit, and the consequences of high real policy rates because both banks and non-bank shadow banks profit by borrowing short and lending long, which they cannot do when the yield curve is inverted, eliminating a key source of credit creation.
causalpending
Speaker
Lacy HuntEvidence Quote
“the inverted yield curve serves to reinforce the decline in money supply Bank credit and the consequences of High real policy rate because not only the banks but the non-bank entities the shadow Banks they make a profit by borrowing short lending long they they can't do that when they are converted [20:26]”
Created: 8/12/2026, 6:42:20 PM
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