Much talk about yields inverting - for beginners
This simple line graph shows weekly yields of 10yr (white), 2yr (aqua), and 3mo (blue). For a period in 2019 (oval) the 3mo stayed over the 10yr and many experts use this as a recession forecaster. Others use the 2yr and 10yr, which inverted at the red arrow in Aug. 2019.
Historically a recession comes about 2yrs after the inversion indicator. It is probable that Covid put a pause on a full U.S. recession because the Fed/gov stepped in to support the economy through the pandemic. This may also mean that if/when a recession comes it may hit harder. The oval on right leaves us wondering if the 10yr yield will soon fall below the 2yr. Every bull cycle eventually switches to a bear cycle... and the U.S. economy is past due for one.
The application of this possible (or likely, according to some experts) recession is to prepare now. Learn how to protect your money in a recession. Take profits on high return investments if you do not want to give it all back. Take steps now to reduce the potential impact of a potential recession. Start planning for new investments to buy (when everyone wants to sell). The good news is that if there is no recession you will probably be well prepared to make your next financial moves.
Historically a recession comes about 2yrs after the inversion indicator. It is probable that Covid put a pause on a full U.S. recession because the Fed/gov stepped in to support the economy through the pandemic. This may also mean that if/when a recession comes it may hit harder. The oval on right leaves us wondering if the 10yr yield will soon fall below the 2yr. Every bull cycle eventually switches to a bear cycle... and the U.S. economy is past due for one.
The application of this possible (or likely, according to some experts) recession is to prepare now. Learn how to protect your money in a recession. Take profits on high return investments if you do not want to give it all back. Take steps now to reduce the potential impact of a potential recession. Start planning for new investments to buy (when everyone wants to sell). The good news is that if there is no recession you will probably be well prepared to make your next financial moves.