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From the Chart Store weekly blog:
<< Every recession since 1970 has been preceded by the yield curve inverting. The yield curve inversions are broadly based, across various maturities (not just a single, particular spread). Normally, the yield curve is still inverted at the onset of the recession (1990 is an exception).
Choosing the Target Rate vs. the 10 year as our proxy, the lead times in calendar days from inversion to the onset of the recession are:
January 1970 to November 1970 Recession - 357 days
December 1973 to March 1975 Recession - 276 days
February 1980 to July 1980 Recession - 497 days
August 1981 to November 1982 Recession - 307 days
August 1990 to March 1991 Recession - 553 days (Inverted from 1-25-89 to 1-17-90, but not at onset of recession)
April 2001 to November 2001 Recession - 315 days
The Federal Reserve's campaign to find a "neutral rate" has pushed the yield curve to the brink of inverting.
The historical record suggests a recession in the future should be preceded by a broadly based inversion lasting at least nine months. >>
<< Every recession since 1970 has been preceded by the yield curve inverting. The yield curve inversions are broadly based, across various maturities (not just a single, particular spread). Normally, the yield curve is still inverted at the onset of the recession (1990 is an exception).
Choosing the Target Rate vs. the 10 year as our proxy, the lead times in calendar days from inversion to the onset of the recession are:
January 1970 to November 1970 Recession - 357 days
December 1973 to March 1975 Recession - 276 days
February 1980 to July 1980 Recession - 497 days
August 1981 to November 1982 Recession - 307 days
August 1990 to March 1991 Recession - 553 days (Inverted from 1-25-89 to 1-17-90, but not at onset of recession)
April 2001 to November 2001 Recession - 315 days
The Federal Reserve's campaign to find a "neutral rate" has pushed the yield curve to the brink of inverting.
The historical record suggests a recession in the future should be preceded by a broadly based inversion lasting at least nine months. >>
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