Welcome to the Eric Erickson Show podcast, Hour 2.

Hello America.

It is Eric Erickson here, the second of our three hours together today.

The phone number is 877-977-9-973-7-4-25.

It is an open line Friday.

I have been keeping my eye on the Dow Jones.

Those of you listen over the weekend, I apologize for making it so necessarily timely, but it really is.

The Dow has recovered a little bit.

It had gotten down to almost 700 points, and its bounceback is now only down 573, but still, down 573 right now.

We are in bare market territory.

The S&P and the NASDAQ have several months ago fallen into bear market territory, and the news continues to be grim.

Yields climbed on Friday, and the yield on the two-year treasury note notched a new 15-year high as markets assessed the Federal Reserve's latest rate hike and what it means for the economy going forward.

The policy sensitive to your Treasury hit a fresh 15-year record of 4.266% earlier in the session, but was last trading at 4.18%.

Meanwhile, the year on the 10-year high, an 11-year high of 3.825% earlier in the session, but last traded flat at 3.7%. Yields and prices move in opposite directions with one basis point equaling 0.01%. The climb in yields came as markets weighed the implication of the Federal Reserve's latest policy and signals its willingness to accept recessions ahead if it doesn't stop inflation.

What does all this mean?

Essentially, it means that the bond market is where people are moving their money because

you've got the full faith and credit of the United States behind a bond.

You don't on a company stock.

So stocks tend to go down and bonds go up during a recession and so people tend to pivot around

there.

And that's what's happening in the economy.

This is in real time we are seeing this today.

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