The Yield Curve Inverted. What now?

"With the two and ten-year US treasury yield inverting in August 2019, many analysts are predicting that the US economy is heading for a recession within the next 24 months."
The Yield Curve Inverted. What now

With the two and ten-year US treasury yield inverting in August 2019, many analysts are predicting that the US economy is heading for a recession within the next 24 months.

The yield curve inverted what now? 10 and 2year graph

Credit Suisse recently reported that the last five times (since 1978) the two and ten-year rates inverted it has eventually led to a recession on average around 22 months later. In this time the S&P has generally rallied close to 12-15%.

Not sure what a Yield Curve Inversion is? Read the description here.

So does this mean there will be a recession again? Well nobody (including me) knows for sure, I’ve always been a believer that correlation doesn’t always imply causation. For me, I will be trying to keep some cash on the sidelines and will instead look at making smart investments where valuations seem skewed.

Remember there’s plenty of macro-environment factors that you should be aware of such as ongoing trade wars, Brexit, upcoming US presidential elections, extremely low-interest rates globally and a significantly overvalued stock market.

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