Recession incoming?

The yield curve has been inverted since July 2022.

Since 1955, every recession has been accurately predicted by an inversion in the yield curve, with one exception in the mid 1960s, when an inverted yield curve was followed by an economic slowdown, but not a full recession.

An inverted yield curve means that the yield on short term Treasury bonds is greater than that of long term Treasury bonds. Typically, investors would expect to receive a higher yield for lending money for a longer period of time than for a shorter period of time. The graph below shows the 10 year (long term) yield minus the 2 year (short term) yield.

The spread between the 10s and 2s is the largest that it has been since the early 1980s.