Chart of the Week: All eyes on the yield curve…

As the joke goes, an inverted yield curve has predicted 11 of the past nine recessions. Its traditionally one of the most reliable harbingers of economic recession but a closer look at timings show that its use is limited. Over the past 50 years, the number of months from inversion (defined here as 1-year US Treasury yields surpassing 10-year yields) to recession has ranged from seven up to 24, averaging 14. So, an inverted yield curve has proved to be a reliable indication of recession, but not its timing.

Read more about what inverted yields curves can show us in “Why US government bond yields are scaring some investors”, one of the articles in our latest InvestmentInsights.

Total votes: 10

Get in touch

Speak with a member of our investment sales team for further information. Please complete our online enquiry form.