Odds of Recession in U.S. are Modest, Higher in U.K.

While, historically, an inverted yield curve (short-term rates above long-term rates) has preceded the end of a bull market and the beginning of a recessionary environment, a recent Barron’s article argues that the risk in the U.S. is relatively modest. The article offers the example of how the U.S. stock market “peaked in 2000 and 2007 when the spread between three-month and 10-year U.S. Treasury yields inverted by about 50 basis points,” adding that while the yield curve is currently inverted to the tune of one percentage point, the spread has “narrowed in recent weeks.” Challenges continue in the U.K., […]