Are the Markets Signalling a Recession?

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Are the Markets Signalling a Recession?

Bond markets have flashed a warning about the state of the global economies. For example, for the first time in more than a decade, yields on 10-year government bonds in the UK and US fell below the yields on their 2-year counterparts. This is an unusual development and it often occurs before a recession or at least a significant slowdown in economic growth. In fact, the yield curve has inverted before every US recession since 1955 – will this time be different?

 

chart website 20190819 COTD - Yield curves
Sources: Bloomberg, Unigestion. Data as at 13.08.2019.

 


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