Economic Perspectives
Despite Yield-Curve Inversions, Recession Appears a Long Way Off
Authored by Brian Jones, FHLBNY Financial Economist
Highlights
September 10, 2019
Inverted portions of the Treasury yield curve have heightened fears of impending recession
Risk of recession based on yield curve growing; negative rates abroad contributing to inversion
Yield curve inversions by themselves do not cause business cycle downturns
Inventory overhang and commodity price shock absent
Monetary and fiscal policy to become more accommodative
Financial conditions offer few hints of an impending downturn
Labor market conditions show no signs of deteriorating
Even before it became the longest expansion in U.S. history in July, the longevity of the current business cycle upturn prompted market participants and commentators to look for signs of its impending demise. With real business activity ambling along at an above-trend pace…
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