Inversion Indignation

This past Friday the yield curve inverted; the 10-year rate fell below the three-month rate, the first time in over a decade. This is significant because an inversion has preceded each of the last seven recessions, often by years. Since 1965, there have been two inversions not followed by a recession. QE has made inversions much more likely and inversions need to last several months before a recession becomes likely.

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