Saturday, April 25, 2015

The Yield Curve Spread as a Powerful Indicator of the State of the Economy

In the current issue of the EPJ Daily Alert, I discuss the yield curve spread and why it is one of the best indicators that will signal when a recession is developing.

Note: The current yield spread far in excess of + 100 basis points backs up my view that we are at present far from the next recession.


1 comment:

  1. I used to follow the yield curve (10Y-1Y) as an indicator of impending trouble. The theoretical rationale certainly was sound. But, this explanation from a ZeroHedge contributor of the impact of the Fed's actions on yields and, hence, the curve, make great sense to me. So, I no longer look to the standard yield curve for an indicator of impending trouble, as, like so many other economic indicators, it appears that it is purposely managed.