Monday, 25 March 2019 12:20

What the Yield Curve Inversion Really Means

Written by
Rate this item
(3 votes)

(New York)

The professor who first identified yield curve inversions has written an article explaining what the development really means. First identified in 1986, a yield curve inversion is considered the most widely accurate indicator of recession. Since it was first identified and back tested, it has accurately predicted a further 3 out of 3 recessions. This is a point its “discoverer” Campbell Harvey hammers home in his article. He explains that an inversion is usually followed by a recession within 12-18 months. The yield curve has not been inverted since before the Crisis, but just did so on Friday.


FINSUM: One of the important points Harvey makes is that in order for the inversion to really indicate a recession, it needs to remain in place for at least three months. We are only at one day.

Contact Us

Newsletter

Subscribe

Subscribe to our daily newsletter

{emailcloak=off}
Top
We use cookies to improve our website. By continuing to use this website, you are giving consent to cookies being used. More details…