We all cycle through periods of development, growth, maturity and decline.
Knowing where your organization is in the cycle is key.
Which is next? The Flash movie below defines lifecycle phases: development, introduction, growth, maturity, decline.
Similarly, economies move through business cycles. This chart shows how the difference between Federal Security yields for 2 year securities (shorter term horizon) and 10 year securities (longer term horizon) provides a leading indicator for credit trends anticipating business activity declining dramatically into a recession.
Click to see larger image - updated monthly
Consumer spending patterns affect demand. This chart shows how Personal Consumption Expenditures (PCE) percentage change from the previous year correlates to credit patterns seen in the 2-10 spread. This spread is the yield difference between 2 yr Treasury securities and 10 year Treasury securities. The greater the spread, the "steeper" the yield curve.
