Are we near a recession?

Is the U.S nearing a recession? That remains the key question on the minds of investors. One of the most closely watched predictors of a potential recession in the bond market, known as the inverted yield curve flashed red.

Key Takeaways

  • An inverted yield curve means interest rates on short-term bonds are paying more than long-term bonds, usually a bad sign for the economy.
  • Not every inversion was followed by a recession, the signal has been wrong on at least two instances*.
  • For the last five recessions, S&P 500 stocks have posted average positive returns of 13.5% for the year following an inversion. Investors should be cautious and not consider an inversion a market timing tool. To better understand what all the chatter is about, let’s begin with the basics.

Read more here

Add Comment

Your email address will not be published. Required fields are marked *