The headline of an article appearing on Slate last week screamed: “The Single Most Reliable Recession Indicator of the Past 50 Years Has Officially Started Blaring.” But should we be worried about the inverted yield curve based on a small sample size of historical events? This podcast (5:38) argues that, paradoxically, today’s low yields may signal we needn’t worry about a near-term market crisis. Rather, dramatically rising yields would signal that investors are demanding compensation for a heightened level of perceived risk.
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