Quick tweet on the yield curve inversions and recessions.
The 2 year/10 year inversion in the yield curve means we are moving from a high growth regime to a lower growth regime. It does not imply a recession. For my statistical nerds, precision is around .5 AKA a coin toss.
The 2 year/10 year inversion in the yield curve means we are moving from a high growth regime to a lower growth regime. It does not imply a recession. For my statistical nerds, precision is around .5 AKA a coin toss.
2/ The 3 month and 10 year on the other hand is a sign that we are going to a low growth low consumption regime. The 3/10 have been inverted for over 40 days now.
3/ Think of it this way: If you are healthy and get the flu, you probably will be fine, in some extreme cases might go to hospital ( that's the 2/10 inverting)
4/ On the other hand, if you are sick and get the flu, you are for sure going to hospital. That's the 3 month and 10 year inverting. Hope this helps in your understanding on how to look at the yield curve.
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