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It's been known since at least the 80's. It's not newfound. Perhaps the retail investor is more aware of it.
by H8crilA 7y ago
It's been known since at least the 80's. It's not newfound. Perhaps the retail investor is more aware of it.
- nostromo 7y agoCan you link me to something on that? I'm genuinely curious. The research I've seen all stems from the original paper, published in the late 90s. (And it took two recessions for it to be taken seriously as a recession indicator.)
- H8crilA 7y agoThe yield curve is built into all assets - that's how you discount future stock earnings to derive present value. An inversion roughly means that the curve was wrong, i.e. the market was overly optimistic about how low the interest rates are going to be. > Campbell R. Harvey's 1986 dissertation[4] showed that an inverted yield curve accurately forecasts U.S. recessions. https://en.m.wikipedia.org/wiki/Yield_curve https://en.m.wikipedia.org/wiki/Yield_curve