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Why this yield curve may not signal a U.S. recession
The US yield curve inversion widened last week to a level not seen since 1981. In a newly published report, Goldman Sachs Research’s economists question the predictive power of this longtime recession indicator and argue why this time might be different. The yield curve is the difference between yields of longer-term (for example 10-year) and shorter term (such as two-year) US Treasuries. Typically, long-term yields are higher because investors demand higher rates to compensate for future uncertainty. But it’s been the opposite since the middle of last year, which traditionally has been seen as a sign that ... (full story)