This Economic Indicator is Signaling an Upcoming Recession
This Economic Indicator is Signaling an Upcoming Recession
This economic indicator is called the "yield curve." When short-term interest rates are lower than long-term interest rates, the yield curve is healthy.
However, when short-term interest rates are higher than long-term interest rates, the yield curve is inverted, which signals an upcoming recession.
Just like every other indicator, this does not guarantee a future event. It only raises the possibility of the future event. Historically speaking, when the yield curve is inverted, a recession may be 12-16 months away. The yield curve has been signaling since last year but has gotten stronger in the past month.
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