Recession Recognition

An inverted yield curve, a situation where short-term rates are higher than long-term rates, has preceded each of the past seven recessions by 8 to 23 months. At present, the yield curve is very close to inverting. But, rarely have we had massive fiscal stimulus this late in a cycle, or a central bank with vast holdings of long-term bonds. So, while I’m concerned, I’m not yet on recession watch.

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