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The Yield Curve Just Inverted, Is a Recession Coming?

The Yield Curve Just Inverted, Is a Recession Coming?

Posted On March 22, 2019 12:34 pm
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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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Steve Smith

Steve Smith have been involved in all facets of the investment industry in a variety of roles ranging from speculator, educator, manager and advisor. This has taken him from the trading floors of Chicago to hedge funds on Wall Street to the world online. From 1987 to 1996, he served as a market maker at the Chicago Board of Options Exchange (CBOE) and Chicago Board of Trade (CBOT). From 1997 to 2007, he was a Senior Columnist and Managing Editor for TheStreet.com, handling their Option Alert and Short Report newsletters. The Option Alert was awarded the MIN “best business newsletter” in 2006. From 2009 to 2013, Smith was a Senior Columnist and Managing Editor for Minyanville’s OptionSmith newsletter, as well as a Risk Manager Consultant for New Vernon Capital LLC. Smith acted as an advisor to build models and option strategies to reduce portfolio exposure and enhance returns for the four main funds. Since 2015, he has worked for Adam Mesh Trading Group. There, he has managed Options360 and Earning 360, been co-leader of Option Academy, and contributed to The Option Specialist website.

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