Is a Recession Here?

Today’s headline from the official Nasdaq site:

The article reported-

“The benchmark U.S. Treasury yield curve on Wednesday posted its largest inversion since November 2000, as investors priced in a full percentage point of Federal Reserve tightening this month that could push the world's largest economy into recession.”

“Expectations of a 100-basis point rate hike came after a more than 40-year peak in annual U.S. inflation in June was reported.”

“The inversion on the U.S. two-year/10-year yield curve US2US10=TWEB accelerate on Wednesday to as much as 24.20 basis points, the most inverted in nearly 22 years, Refinitiv data showed.”

“Yield curve inversions are widely seen as precursors to recessions.”

Say hello to the 70’s?

The release of the inflation numbers show the CPI (US consumer price index) is at 9.1%. This is the largest increase in over 40 years.

Cramer, as always weighs in and gives his thoughtful insight:

“Yield curve inversions have typically preceded every recession since the 1950s, albeit with a lag that could take anywhere from months to a few years. Analysts disagree, however, on whether the 2s10s spread is the best part of the Treasury curve to look at and some even dismissed its brief inversion earlier this year.” (Source: Marketwatch)

Nick Emmack, Macro & Blockchain investor posted this today in his LinkedIn thread (H/T Nick):

We will have to see where all of this shakes out over the next quarter and beyond.

The chart below is from Russell Investment Economics Indicator dashboard. You can see interesting data on their site at this link.