JIN10
2024.08.05 13:02
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Analyst: The yield curve inversion signals that the real arrival of an economic recession is imminent

Based on the information provided, this information pertains to macroeconomic-related information. According to this information, it can be summarized as: an inverted yield curve signals the arrival of an economic recession, while the real indication of a recession is when the curve returns to normal. This situation indicates market contraction, and attention should be paid to whether there are real underlying economic issues

On August 5th, Jinshi Data reported that Adam Button, an analyst at the financial website Forexlive, stated that since 1955, the yield curve inversion has maintained a good track record in predicting economic recessions in the United States. However, what truly signals the arrival of a recession is not the curve inversion, but when the curve returns to normal. We can think of it as a storm forecast, where inversion indicates the formation of a storm, and the normalization indicates the storm making landfall, especially during the front-end dominated bull steepening period. We won't see a recession before the data shows it, but the market is definitely contracting. In addition to the slope of the curve, the 2-year U.S. Treasury yield has dropped by 20 basis points, nominally 170 basis points lower than the Federal Reserve's fund rate. This situation would not occur if there were no real economic problems