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Wed Aug 14, 2019, 11:01 AM

YIELD CURVE INVERTS: Recession indicator flashes red for first time since 2005 [View all]


The marketís most closely watched part of the yield curve inverted today, and if its record over the last half-century is any indicator, the U.S. could be headed for a recession soon.

Shortly after 6 a.m. ET on Wednesday, the yield on the 10-year U.S. Treasury bond dipped below the yield on the 2-year U.S. Treasury as the 10-year fell 1 basis point below the 2-year. The yield curve inversion has a strong track record of predicting a recession; each of the last seven recessions (dating back to 1969) were preceded by the 10-year falling below the 2-year.

Ahead of the last recession, the yield curve inverted briefly as early as December 27, 2005, about two years before the financial crisis sent the economy into recession.

For over a year after that, the yield curve fluttered in and out of inversion. The last inversion, as measured by U.S. Treasury data collected by the St. Louis Fed, was in 2007.

By no means am I a finance guy, but even I know that this is a bad thing.


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Reply YIELD CURVE INVERTS: Recession indicator flashes red for first time since 2005 [View all]
SidDithers Aug 14 OP
CountAllVotes Aug 14 #1
MissB Aug 14 #2
2naSalit Aug 14 #3
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SidDithers Aug 14 #6
Johnny2X2X Aug 14 #5
SidDithers Aug 14 #7