Olde Hornet
Well-Known Member
Bond markets are sending one big global recession warning
https://www.cnbc.com/2019/08/14/bond-markets-are-sending-one-big-global-recession-warning.html
The U.S. bond market just flashed what could be its biggest warning yet of a coming recession, and it is not alone.
The spread between the 2-year Treasury yield and the 10-year yield flipped so that the 2-year is now higher than the benchmark 10-year yield for the first time since June, 2007. Other parts of the curve have already inverted, but traditionally the 2-year to 10-year spread is the most widely watched by market players.
The U.S. 30-year bond yield fell to a record low early Wednesday, touching 2.015% for the first time ever, falling through its prior record of 2.08%. Yields across Europe fell, and the German 10-year bund touched a new low of negative 0.65%.
An inverted yield curve has been a reliable recession indicator, but it does not always precede a recession and the length of time before a recession occurs has varied. According to Credit Suisse, the average length of time since the late 1990s for a recession to occur after inversion was 22 months.