The yield curve has steepened considerably in the past month. Some think it means recession risk has diminished.
Yield Curve Debate
Not necessarily @greg_ip @IanShepherdson
Look at a chart of the yield curve it steepenes at the onset of recessions. Another possibility to consider, despite the alleged strength of the economy is the yield curve will not invert prior to recession. https://t.co/d9BdRY3UPp
— Mike Mish Shedlock (@MishGEA) October 12, 2018
A longer-term picture will put the steepening in perspective.
10-Year Minus 2-Year Treasury Yield
The yield curve has not inverted this time. But what if it doesn’t. There is no universal law that says the yield curve will invert before a recession. Look at Japan for proof.
With so many eyes on the yield curve flattening, perhaps it doesn’t.
