The inverted yield curve is also known as a leading indicator that has the ability to predict recessions generally 6-18 months out.
Whilst a ‘technical’ recession is considered to be when a country has two consecutive quarters of negative GDP growth, recently there’s been a debate amongst economists and other various market participants, with some arguing that a significant negative move in the employment numbers better represent recessions.
Nevertheless, when looking at the US 10 year versus the 2 year yield spreads, the 10-2 yield spread has been inverted throughout 2023. According to data from the Federal Reserve Bank of San Francisco, an inverted yield curve has accurately predicted all 10 recessions since 1955, with only one false positive in the mid-1960s.
What are your thoughts, will there be a recession in 2024, or will the track record of this leading indicator be populated by a false-positive?
This chart is an excerpt from our “2023 year-in-review” newsletter issue on the Economy. You can find the full article and charts at
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The inverted yield curve is also known as a leading indicator that has the ability to predict recessions generally 6-18 months out.
Whilst a ‘technical’ recession is considered to be when a country has two consecutive quarters of negative GDP growth, recently there’s been a debate amongst economists and other various market participants, with some arguing that a significant negative move in the employment numbers better represent recessions.
Nevertheless, when looking at the US 10 year versus the 2 year yield spreads, the 10-2 yield spread has been inverted throughout 2023. According to data from the Federal Reserve Bank of San Francisco, an inverted yield curve has accurately predicted all 10 recessions since 1955, with only one false positive in the mid-1960s.
What are your thoughts, will there be a recession in 2024, or will the track record of this leading indicator be populated by a false-positive?
This chart is an excerpt from our “2023 year-in-review” newsletter issue on the Economy. You can find the full article and charts at
[](https://fetcharts.substack.com/p/the-2023-economic-digest)
Zoom out, and stop using screenshots.
What do I do with this information? What is a yield curve and why do I care that it’s inverted?