Insight

What Happened to Stocks when Bonds flashed a huge Recession Signal?

Yield curve has been a reliable recession indicator in the past. The spread between the 3-month Treasury bill and the 10-year note went into negative territory on Friday, the first time since 2007.

The more widely watched part of the curve — the gap between yields on the 2-year and 10-year debt — is getting closer to inversion as well, falling to just 10 basis points, versus 60 basis points a year ago.

Don’t panic yet.  Stocks could have a lot more room to run even if the feared “yield curve” inverts, history shows.

Reference:

CNBC, Yun Li, 2019-03-22, “Bonds are Flashing a Huge Recession Signal – here’s What Happened to Stocks Last Time it Happened

Tags

Related Articles

Back to top button
Close