Keep Your Eyes on the Yield Curve
Since the Great Recession global markets have experienced an unprecedented positive run; with an end to the good times and a recession almost inevitable. However, it’s not necessarily around the corner. A key indicator of an imminent recession is the slope of the yield curve and the spread between short and long-term interest rates. With today’s 10-Year versus 1-Year yield spread of +0.50 percent and the FOMC telegraphing four more hikes through the end of 2019 (at a ~0.25 percent clip), there is a reasonable likelihood that the yield curve could invert by mid-to-late 2019.
For more information about these inverted yield curves click here.