Daily Archives: Jun 5, 2019 at 07:51 am EDT

Two Yield Spreads Are Better Than One For Business Cycle Analysis

The US recession warnings are flying every which way lately in the wake of an inverted yield curve. The spread on the 10-year less 3-month yields in particular has unleashed a wave of predictions that a new downturn is near. But some analysts point out that another widely followed spread — 10-year less 2-year yields – is still positive, albeit modestly so. What’s an informed investor to do? Wait for both spreads to confirm a recession forecast before betting the farm on contraction.

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Macro Briefing: 5 June 2019

Senate Republicans push back on Trump’s plans for tariffs on Mexico: NY Times
Mexican officials to meet with VP Pence today for tariffs talk: Reuters
Trump: there’s ‘always a chance’ of military action against Iran: CNBC
Fed’s Powell is open to rate cuts if warranted: WSJ
World Bank cuts forecast for global growth in 2019: WB
US auto sales rebounded in May: Yahoo Finance
US factory orders’ 1yr trend was subdued in April at +1.0%: