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Sure is, and just this past Wednesday, a freelance journalist named Steven Beckner asked Fed Chair Powell a question about the inverting yield curve. Powell's response? "I'm not too concerned about it."
It means that shorter length securities are giving a higher yield than longer length securities, which is rare. There are different length treasuries ranging from one month to 30 years. In this case the 3-month has inverted with the 10 year. Back in December there was an inversion of the 2-year and 5-year. The classic inversion people look at is the 2-year and 10 year. But more and more of these short duration yields are inverting with longer duration yields.
For the last hundred years or so in the US economy, an inverted yield curve has presaged a recession, some bad, others mild.
I believe this has been true in both ways -- every inverted yield curve was followed in a certain time by a recession, and every recession was preceded in a certain time by an inverted yield curve. I think the time window was 12 or 24 months.
I further believe this holds true all the way back to the panics after WW1 and before the Great Depression.
“In fact, stocks rose about 15 percent on average in the 18 months following inversions, according to a Credit Suisse analysis last year. The data show the stock market tends to turn sour about 24 months after the yield curve inverts. Three years after an inversion, the S&P 500 is up just 2 percent, on average as stocks take a hit on recession fears.“
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