> The USTreasury yield curve has risen dramatically over the past 8 weeks. We are rapidly moving towards a flat curve which is an improvement over an inverted one.
Doesn't that predict a recession, though? If the yield curve is finally coming out of inversion now, wouldn't we expect to see a recession ~6 months later?
Statistically speaking you are correct. The average recession occurs 6mo later. History doesnt repeat but it rhymes. I think this time we've already had a recession but it was masked by government spending.
The S&P500 peaked at the end of '21. So that's when the market began to anticipate something was wrong. I wrote about GDP revisions that were happening in July of '22. In that month I also wrote how the NBER wasn't going to call it a recession because we didn't have a republican president. It was an inflationary recession as the government spent to cover up the hole in GDP. At the end of '23 we saw the money supply go positive, that was probably the signal that it was over.
> The USTreasury yield curve has risen dramatically over the past 8 weeks. We are rapidly moving towards a flat curve which is an improvement over an inverted one.
Doesn't that predict a recession, though? If the yield curve is finally coming out of inversion now, wouldn't we expect to see a recession ~6 months later?
Statistically speaking you are correct. The average recession occurs 6mo later. History doesnt repeat but it rhymes. I think this time we've already had a recession but it was masked by government spending.
Where do you locate the beginning and end of this recession?
The S&P500 peaked at the end of '21. So that's when the market began to anticipate something was wrong. I wrote about GDP revisions that were happening in July of '22. In that month I also wrote how the NBER wasn't going to call it a recession because we didn't have a republican president. It was an inflationary recession as the government spent to cover up the hole in GDP. At the end of '23 we saw the money supply go positive, that was probably the signal that it was over.