The yield on 10-year versus 2-year Treasury bonds is now inverted. Inversion is a helpful signal that there is a greater risk to the economy in the short run, indicating a recession may be on its way.
However, in history, every single time it happens, a recession happens months later.
The above chart is taken from https://fred.stlouisfed.org/series/T10Y2Y. Every time the chart dips below zero, a vertical column – indicating US recessions – take place.
The silver lining is that the Fed will very likely lower interest rates to combat recession when it happens.
Market is going to be volatile!
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