-
US yield curve: Self-fulfilling prophecy?
The US economic expansion is now into its ninth year, the second-longest on record. So even as growth is hitting new heights, it’s little wonder there is more and more anxiety about when the next recession might come along. In particular, the US yield curve has been under increasing scrutiny. When short-term rates rise above long-term rates and the curve inverts - a recession usually follows. This is why the inverted yield curve is one of the most widely followed early warning indicators. The yield curve’s predictive power is generally believed to be derived from the way the curve captures investor’s beliefs ... (full story)