ASR in FT Unhedged: solving the puzzle of a strong economy vs. inverted yield curves
Beth McCann
5th JUL. 2023
The FT’s Rob Armstrong considers “how to balance evidence of a remarkably strong economy against …. inverted yield curves…. (which) for the past 60 years … has been a remarkably reliable recession indicator.”
He continues, “The solution to this puzzle may be a simple as timing. As Dominic White of ASR pointed out to us…”
“…the 10 recessions the 10-year/three-month yield curve has predicted since 1957 (without a false positive), the average period between the first inversion of the curve and the official start of recession has been nine months. The range runs from four months (the 1960-61 recession) to 16 months (2007-09). This time around, the curve first inverted last October 18, a little under nine months ago. History has more time to be right.”
To read the full column in FT Unhedged, please click HERE (FT subscription may be required)
ASR clients can read the latest research from ASR chief economist Dominic White:
ASR Economics - Top 2023 charts: a half-time report
ASR Economics - Waiting for the Godot recession
ASR Insight - There’s no such thing as excess savings
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