Panic around the inversion of the yield curve in the United States

Alert in the United States. The yield curve is inverted. Across the Atlantic, the new one has a clear meaning for the common man: a recession is announced! Dona

Panic around the inversion of the yield curve in the United States

Alert in the United States. The yield curve is inverted. Across the Atlantic, the new one has a clear meaning for the common man: a recession is announced! Donald Trump immediately responded on 14 August last year, when the rate of Treasury bills of two years became higher than the rate ten years ago. The president, who does not want to hear talk of a slowdown in the u.s. economy, which has been cracked by a tweet that pissed off about this "CRAZY INVERTED YIELD CURVE" ("crazy rate curve reversed"), in capital letters! The phenomenon is new product Thursday.

Why so much hype? The economic literature demonstrates a relationship between the yield curve and the growth since the late 1960s. Each time that the short-term rates became higher than long rates, the United States has been hit with more or less short term by a slowdown. For example, the spread between the rate to ten years and rates at three months became negative between August 2006 and ...

Updated Date: 30 August 2019, 00:00

Kathleen Lees

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