Market notes: is the yield curve flashing danger?

All investors are rightly keeping their eyes on the US yield curve, which has been flattening and is widely regarded as one of the necessary (but not sufficient) conditions to warn of the next recession and bear market. While the gap between short and long term yields has narrowed, interpretation does depend a little on which maturity yields you take as your basis for analysis. And even then it is not entirely clear whether you should be alarmed by - or simply take note of - the current state of what the curve is suggesting. My view is that the current state of the curve is not yet flashing danger signs, although it needs to remain on your watch list. If and when it inverts, that will be a different matter, though even then only a warning of what lies ahead, not an immediate signal. Why not more concern?

I am sorry but you do not have access to this page, which is for subscribers only. To become a subscriber, follow the Subscribe Now tab at the top of this page.

If you feel that you should have access to this material, but have been unfairly denied, please send an email to admin@independent-investor.com in the first instance.