Yield Curve, Impulsive Move, Recession

For those who believe yield curve doesn’t matter, before you read on further, just remember that yield curve inversions have preceded the last seven recessions and nine out of the last 12 recessions. The last yield curve inversion that did not precede a recession was in the mid 1960’s. Now some may argue it is different this time because great printing presses at the Fed that have replaced traditional interest rate cycles have clouded the relevancy of this indicator. Perhaps that’s true, but only time will tell.

How Yield Curve Behaved From August 2019 to Currently – Back in August 2019, it was the first time since 2008 GFC that critical yield curve, known as the spread between yields of 10 year and 2 year bonds, briefly turned negative and as a result calls for a pending recession in the US went up