TQQQ - Short And Sharp: Yield Curve Inversion - A False Positive?

By Seema Shah, Global Investment Strategist, Principal Global Investors

Last week, market interest rates dropped and hit the panic button. The three-month to 10-year (3m10y) portion of the U.S. treasury curve inverted for the first time since 2007. History tells us to respect the inversion, so it's understandable that investors are spooked - every U.S. recession in recent decades has been preceded by an inversion of the 3m10y yield curve. Yet, it's also true that not every inversion has been followed by a recession. Is this inversion a false positive?

It's too early to tell.

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