It’s official -- the yield curve has now definitely inverted, meaning that one of the most reliable signals of an impending recession is now flashing warning signs.
An inverted yield curve means that investors expect interest rates to fall, which typically happens in a contraction. It tends to take 12 to 18 months.
It’s even possible that the yield curve could be giving a false signal. For now, U.S. economic data such as retail sales and jobless claims are holding up reasonably well.
This suggests that a U.S. recession, if it comes, will be part of a world slowdown. Americans tend to think of their own markets and their own consumption as the driver of both booms and busts. That may not be true this time around.
Instead, any recession may be made in China. In recent years, China has contributed more to global growth than any other country, and it was projected to do the same in the years to come.
No comments:
Post a Comment