{"id":177598,"date":"2019-08-08T18:48:00","date_gmt":"2019-08-08T23:48:00","guid":{"rendered":"https:\/\/www.panix.com\/~msaroff\/40years\/2019\/08\/08\/an-inverted-yield-curve-predicted-twelve-of-the-last-five-recessions\/"},"modified":"2019-08-08T18:48:00","modified_gmt":"2019-08-08T23:48:00","slug":"an-inverted-yield-curve-predicted-twelve-of-the-last-five-recessions","status":"publish","type":"post","link":"https:\/\/www.panix.com\/~msaroff\/40years\/2019\/08\/08\/an-inverted-yield-curve-predicted-twelve-of-the-last-five-recessions\/","title":{"rendered":"An Inverted Yield Curve Predicted Twelve of the Last Five Recessions"},"content":{"rendered":"

<\/a>For those who are not up on the term, longer term bonds typically pay more interest than shorter term ones, because they lock up your money for a long time.<\/p>\n

When, for example, the 3-month US Treasury pays more than a 10-year treasure, the yield curve is said to be inverted.<\/p>\n

This is significant because pretty much every US recession since the end of World War II has been preceded by an inverted yield curve, though, to be fair, a lot of not-recessions have been preceded by inverted yields as well.<\/p>\n

Well, we are now seeing a pretty large inverted yield curve<\/a>: <\/p>\n

A widely watched bond market indicator sent its strongest recession warning in more than a decade on Wednesday, as the global growth outlook dimmed and questions swirled about the Federal Reserve\u2019s commitment to cut interest rates in light of rising US-China trade tensions.<\/span>

<\/span>The yield on three-month US Treasury traded as much as 41.23 basis points above that on the benchmark 10-year government bond \u2014 the widest gap since March 2007. Such an inversion of the yield curve \u2014 in which short-term yields are higher than longer-term ones \u2014 has preceded every recession of the last half century.<\/span><\/p><\/blockquote>\n

My guess is that this time it is right, because it’s been a long time, and our economic growth seems to be primarily an artifact of speculation and consumer debt, neither of which are sustainable.<\/p>\n","protected":false},"excerpt":{"rendered":"

For those who are not up on the term, longer term bonds typically pay more interest than shorter term ones, because they lock up your money for a long time. When, for example, the 3-month US Treasury pays more than a 10-year treasure, the yield curve is said to be inverted. This is significant because …<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[],"tags":[392,456,458],"class_list":["post-177598","post","type-post","status-publish","format-standard","hentry","tag-economy","tag-finance","tag-recession"],"_links":{"self":[{"href":"https:\/\/www.panix.com\/~msaroff\/40years\/wp-json\/wp\/v2\/posts\/177598"}],"collection":[{"href":"https:\/\/www.panix.com\/~msaroff\/40years\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.panix.com\/~msaroff\/40years\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.panix.com\/~msaroff\/40years\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.panix.com\/~msaroff\/40years\/wp-json\/wp\/v2\/comments?post=177598"}],"version-history":[{"count":0,"href":"https:\/\/www.panix.com\/~msaroff\/40years\/wp-json\/wp\/v2\/posts\/177598\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.panix.com\/~msaroff\/40years\/wp-json\/wp\/v2\/media?parent=177598"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.panix.com\/~msaroff\/40years\/wp-json\/wp\/v2\/categories?post=177598"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.panix.com\/~msaroff\/40years\/wp-json\/wp\/v2\/tags?post=177598"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}