Part 2) Don't Fight The FED. The Yield Curve is Fine.

All over financial news we're being told that the yield curve is inverting, spreads are flattening, the recession clock is ticking, there's impending doom around every corner. CNBC, Bloomberg, Yahoo Finance, The Wall Street Journal, Forbes, The Economist, you pick your favorite news source and they're talking about 2's and 10's, 10's and 30's, it's Armageddon!!!

How about we look at the actual indicator the FED uses to predict U.S. Recessions. The Federal Reserve uses the 10-year/3-month term spread as it's most reliable indicator to predict U.S. Recessions. The charts posted above come directly from the Federal Reserve of New York's website. According to the FED's data the likelihood of a recession in the next 12 months is about 6%.

Here is the link to the website:

newyorkfed.org/research/capital_markets/ycfaq

Link to the interactive charts:

newyorkfed.org/research/capital_markets/ycfaq

Link to FAQ's:

newyorkfed.org/research/capital_markets/ycfaq

The team at All Star Charts did an interesting post on this topic just recently. I suggest you take a look.

allstarcharts.com/the-truth-about-the-yield-curve/?inf_contact_key=00b6d166ceaaa96606f75acf629c2e9ed18a532c4142cb79caf2b269de1401fa


Food for thought. Thanks for reading. Good Luck to All!!