“The bond market is flashing its biggest recession sign since before the financial crisis”
March 25, 2019
“Federal Reserve Chairman Jerome Powell‘s assertion this week that the U.S. economy remains strong is facing a stern test from the bond market, which showed a classic recession sign Friday morning.
Short-term government fixed income yields are now ahead of the longer part of the curve, delivering a strong recession indication that hasn’t happened since 2007.
The spread, or yield curve, between the 3-month and 10-year Treasury notes just broke the longest streak ever of being above 10 basis points, or 0.1 percentage point. The two maturities were last below that level in September 2007, a run of 3,009 trading days, according to Bespoke Investment Group…
The Federal Open Market Committee, which sets monetary policy for the Fed, said Wednesday that it won’t be raising rates anytime soon — likely for at least the rest of the year — unless economic conditions change…”