The yield curve has a great historical track record in predicting U.S. recessions and it’s signaling one’s coming. The 10-year Treasury bond now yields more than 1 percent less than the 3-month bill. That’s unusual, in fact, it’s lower than we’ve seen at any point in the last 30 years. It’s been a historically robust indicator that a recession is coming. Yet, in contrast to this stark warning, the jobs market remains robust.
Slope Of U.S. Yield Curve
The Yield Curve As a Recession Indicator
The New York Federal Reserve (Fed) summarizes the research on the yield curve as a recession indicator here and finds that the U.S. yield curve is a historically reliable signal that a recession is coming on a 12-month view.
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