QQEW - Lags Demand Respect
2024-06-25 14:50:00 ET
Summary
- The US 10-2yr Treasury yield curve has been inverted (two-year yields higher than ten-year) for 23 months since July 2022.
- An inversion in this spread has preceded the onset of every recession in the last 50 years by an average of 10 months.
- Market participants have short attention spans and the longer the inversion lasts, the more the consensus typically dismisses the indicator as no longer relevant.
The US 10-2yr Treasury yield curve has been inverted (two-year yields higher than ten-year) for 23 months since July 2022. An inversion in this spread has preceded the onset of every recession in the last 50 years by an average of 10 months. Generally, longer-than-average inversion periods (11 months Sept 12, 1980, to Oct 23, 1981, 19 months Dec 13, 1988, to June 29, 1989, 12 months Feb 2 to Dec 28, 2000 and 18 months Jun 8, 2006, to Mar 20, 2007) preceded deeper than average loss cycles for stocks and real estate....
Lags Demand Respect