The Yield Curve Just Inverted, Is a Recession Coming?

by Options Sensei |

While the U.S. economy seems to be maintaining steady, moderate growth, most of the rest of the globe’s economy is deteriorating towards recessionary levels.

Can the U.S. decouple from the rest of the world and avoid the same fate?  The bond market, which saw the yield curve invert this morning, is shouting a resounding, “No!”

Between an increasingly dovish Fed, other Central Banks maintaining quantitative easing policies and a slew of weak economic data out of Europe, the10-year U.S. morning yield has dropped some 25 basis points in the past three weeks and now stands at 2.47%, — the lowest level in nearly three years.

We had almost had an inversion back in early December when saw the 3-year vs. 5-year invert, which sent prognosticators into overdrive with predictions the economy is heading…

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