This long term chart compares the SPX (orange), US10Y (white) and the Fed's National Activity Index (blue).
Note the extended periods of the NAI which remain below 0 marking recession.
The 10 year yield tends to peak well in advance of the next recession. On a daily basis we see ongoing concern about the 10y-3mo inverted yield curve as an indication of looming recession. (However we've yet to see inversion of the 10-2 slice of the curve.)
Despite the low unemployment rate of 3.6%, there has been sharp rise in expectations for Fed cuts in the next 6 months.
Moodys: "The implied probability of a fed funds rate cut at the Federal Open Market Committee’s July 31 meeting
recently soared to 72% mostly in response to Jerome Powell’s apparent willingness to heed the recessionary warning of a possibly persistently inverted yield curve."
A declining economy would result in falling inflation expectations and lower prices for materials and products.
Recessions are often slow to arrive, often 12 to 18 months after a treasury yield curve inversion occurs.
Note the extended periods of the NAI which remain below 0 marking recession.
The 10 year yield tends to peak well in advance of the next recession. On a daily basis we see ongoing concern about the 10y-3mo inverted yield curve as an indication of looming recession. (However we've yet to see inversion of the 10-2 slice of the curve.)
Despite the low unemployment rate of 3.6%, there has been sharp rise in expectations for Fed cuts in the next 6 months.
Moodys: "The implied probability of a fed funds rate cut at the Federal Open Market Committee’s July 31 meeting
recently soared to 72% mostly in response to Jerome Powell’s apparent willingness to heed the recessionary warning of a possibly persistently inverted yield curve."
A declining economy would result in falling inflation expectations and lower prices for materials and products.
Recessions are often slow to arrive, often 12 to 18 months after a treasury yield curve inversion occurs.