Is another recession coming?
If you are going by the premier recession indicator — the yield curve — then it is almost certain at this point.
The spread between the two- and ten-year yields is the highest it has been since the 1980s, coming in at -84 basis points.
Here is a chart courtesy of Holger Zschapitz, a market analyst.
US recession alarm getting louder! US yield curve most inverted since 1981: US 2s/10s yield spread at -84bps. pic.twitter.com/xGUI8S1hFr
— Holger Zschaepitz (@Schuldensuehner) December 8, 2022
This matters because it essentially measures bond investors’ risk tolerance, which includes the overall economy.
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