I’ll be short and to the point today:
There’s a phenomenon occurring in the investment marketplace today that few reporters and analysts are freely talking about. I’m referring to the presently existing inverted yield cure.
An inverted yield curve occurs when investors can get better returns on two-year U.S. Treasuries than they can get on 10-year U.S. Treasuries. Over the past quarter-century, whenever there has been an inverted yield curve, a recession followed in all but one occurrence.
INVESTOR ALERT– As I write this column this morning, a two- year U.S. Treasury is yielding 4.67 percent, a 10-year U.S. Treasury is yielding 4.58 percent, and a 30-year U.S. Treasury is yielding 4.57 percent. Yes, investors can get a better return on their money buying a short-term U.S. bond as opposed to a long- term U.S. bond.
I’ll keep you posted on just how inverted the yield curve gets over the next few days and weeks. The more the yield curve inverts, the more I believe we’re headed for tough economic times and, yes, a possible recession.