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Yield Curve inversion suggests mild recession

There has been acute interest in the inversions currently taking place on the term-spreads around the world: And this comes as no surprise, since more than half of the world’s sovereign yield curves have now inverted… Right now, 70% of the U.S yield-curve cluster comprising the 10/5/3/2/1 year bond yields are inverted as shown below. In prior research we have advocated using greater than the 60% threshold to have a “guaranteed lock-in” of the inversion: A closer inspection shows that […]

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