Recession Indicator Starting to Flash
from The Investors' Corner Hosted by Paul Cerro
* The term yield curve refers to the relationship between the short- and long-term interest rates of fixed-income securities issued by the U.S. Treasury. * An inverted yield curve occurs when short-term interest rates exceed long-term rates. * The U.S. curve has inverted before each recession since 1955, with a recession following between six and 24 months later, according to a 2018 report. It offered a false signal just once in that time. * The yield curve has been flattening over the last few months as the Federal Reserve prepares to hike rates, and some analysts are forecasting more extreme moves or even inversion. * While rate increases can be a weapon against inflation, they can also slow economic growth by increasing the cost of borrowing for everything from mortgages to car loans. * The last time the yield curve inverted was in 2019. The following year, the United States entered a recession - albeit one caused by the global pandemic. Until next time, Cedar Grove Capital New? Sign Up Here Got Feedback? Just Hit Reply Twitter: @paulcerro This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit cedargrovecapital.substack.com
Embed this episode
No transcript yet.