US: The self-fulfilling threat of an inverted yield curve
From think.ing.com
On the economics dashboard of doom, we have another flashing warning light. Overnight we have seen the inversion of the 2-10 year part of the Treasury yield curve, the first time this has happened since 2007 when the global financial crisis started to bite. Moreover, an inverted yield curve preceded all nine of the US recessions since the mid-1950s so it is understandable why economists are getting a little nervous. In normal times investors want to be compensated for the risk of lending for longer periods of time – you do not know what may happen over the next ten years (will inflation spike, will a country get into ...
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