Yesterday we furrowed our brow against the latest inversion of the “yield curve.”
The 10-year Treasury yield has slipped beneath the 3-month Treasury yield — to its deepest point since the financial crisis, in fact.
Inverted yield curves precede recessions nearly as reliably as days precede nights, horses precede carts… lies precede elections.
The 10-year Treasury yield has dropped beneath the 3-month Treasury yield on six occasions spanning 50 years.
Recession was the invariable consequence — a perfect 1,000% batter’s average.
But an inverted yield curve is no immediate menace.
It may invert one year or more before uncaging its furies.
But today we revise our initial projections — as we account for the “adjusted” yield curve.
The “adjusted” yield curve indicates recession may be far closer to hand than we suggested yesterday.