It’s all about the lags

LinkedIn/David Rosenberg/7-27-2023

“The fact that Fed-induced curve inversions have presaged recessions 100% of the time in the past is never respected. Always a case of hope triumphing over experience. Thing is — very rarely do recessions occur in the same month as the onset of the inverted yield curve. There are lags, and that typically can be a year or longer. Think back to 2007. But like the story of the boy who cried wolf, the wolf did show up in the end.”

USAGOLD note: A heads up from Rosenberg……

Recessions follow inverted yield curves with a lag
(Grey bars = recessions)
lince chart showing the inverted yield curve relationship to recessions
Source. US Federal Reserve [FRED]

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