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https://www.wsj.com/articles/dont-swing-at-the-yield-curve-32088490

Don’t Swing at the Yield Curve

Inversions of the yield curve have reliably forecast recessions, but the current one could just reflect flawed market assumptions

By Justin Lahart
The inverted Treasury yield curve is hitting extreme new levels. But paradoxically, it may be suggesting that investors are both more worried about a recession and less worried. WSJ’s Dion Rabouin explains. Illustration: David Fang

When the Federal Reserve pushes shorter-term interest rates above long-term Treasury yields, it has typically been a sign that the central bank has tightened to the point that a downturn beckons. Confidence in the predictive power of such yield curve inversions is a big part of why many investors believe the economy is now destined for a recession.

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Copyright ©2023 Dow Jones & Company, Inc. All Rights Reserved.

Copyright ©2023 Dow Jones & Company, Inc. All Rights Reserved

This copy is for your personal, non-commercial use only. Distribution and use of this material are governed by our Subscriber Agreement and by copyright law. For non-personal use or to order multiple copies, please contact Dow Jones Reprints at 1-800-843-0008 or visit www.djreprints.com.