Last week stocks shuddered as ten year yields dipped below treasury bills, reminding investors that yield curve inversions eerily precede recessions. A St. Louis Fed model using the yield curve gives a 30% probability of a recession within a year, up from 24% in December. Nonetheless, the S&P500 is within 5% of its all-time high, reflecting only modest concern.
A reliable point of agreement with any 15+ year market veteran is surprise at consistently low long term interest rates. We’ve all spent our entire careers fretting over the Federal deficit and the possibility that it