Opinion: This is the real reason why the U.S. economy isn’t in recession danger now

in fed •  6 years ago 

The Yield Curve is not a signal for recessions.

It is true that a recession often coincides with an inverted Yield Curve. The reason this is stems from the fact that the Fed often takes to long to reverse course.

The Curve, instead, is a better indicator of future policy. We saw the Fed reverse course based upon the change in the Yield Curve dating back to June.

This time might be different if the Fed acted quickly enough. With little inflation, the move means a dovish stance is warranted.

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