Yield Curve
Updated
The 2/10 treasury yield spread is quickly flattening and an inversion could happen soon.
All of the previous yield curve inversions are associated with memorable market sell-offs and recessions.
I believe the ripple effect of the ongoing financial and economic sanctions against Russia will end up being the catalyst for the next meltdown.
The market conditions have been favorable to a disaster by many measurements for some time now.
Again, there are many unknown cross-currents beginning to work their way into the global economy. On top of that, the FED is raising interest rates in less than two weeks.
All of the previous yield curve inversions are associated with memorable market sell-offs and recessions.
I believe the ripple effect of the ongoing financial and economic sanctions against Russia will end up being the catalyst for the next meltdown.
The market conditions have been favorable to a disaster by many measurements for some time now.
Again, there are many unknown cross-currents beginning to work their way into the global economy. On top of that, the FED is raising interest rates in less than two weeks.
Note
The crash of '89 was not the most memorable, but it did occur on Friday the 13th!Note
Today we saw the inverted yield curve poke its head above water and quickly yell, "You're all screwed," and then dive back under.
That was the 10-2 yield curve officially un-inverting for a brief time this morning and then falling negative again. We are screwed because an inversion of the 10-2 curve is a highly reliable (not perfect) leading indicator of recession in the coming ~18 months. The un-inversion of the 10-2 is a coincidental indicator of the recession itself, meaning they happen at the same time.
So does that mean there is a recession right now? Maybe...
If there were a recession happening right now, the gov. and the people on TV won't officially refer to it as one until about nine months after the fact (lagging indicator).
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