Yield Curve vs Econ and Stock Market

Arturo Estrella a former economist at the New York Federal Reserve has extensive experience working with debt yield curves versus the economy.

Analysts normally watch the 2-year rate versus the 10-year for a characteristic of flat to inverted curve a signal of a coming recession for the US economy.

Estrella finds the 3-month versus the 10-year Treasury note curve as a better insight. Believes a flat to inverted curve leads a recession by 9 to 15 months with an average time of about a year.

The curve is approaching flat. A December Fed rate hike would likely push it to flat if not inverted. A potential caution flag.


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