US Treasuryyields reached a negative spread overnight as key yield curves inverted. Thisis the first time since 2007. And we all remember what happened next.
If the yield curve inverts, it means the marketanticipates a big drop in interest rates sometime in the next year or two and big interest rate drops usually mean recessions. Giventhis key inversion indicator has predicted every US recession for at least the last 60 years, anyone saying “but it’sdifferent this time” is ignoring history.
