Inverted Yield Curve Flashes Recession Warning Amid Trade Tensions
Summary
Amid escalating trade tensions and concerns about slowing growth, a rare inversion of the yield curve, with long-term rates dipping below short-term rates, has flashed a warning signal about a potential recession, though solid economic data suggests it may not be imminent.
Key Points
- The 10-year Treasury yield fell below the 3-month yield, creating an inverted yield curve which is seen as a recession signal
- While yield curve inversions have preceded past recessions, they don't guarantee one will occur this time
- Concerns over Trump's trade agenda and slowing growth are contributing to investor worries despite solid economic data