- A yield curve inversion is not a necessary prerequisite for a recession.
- In the post-World War II era, several recessions happened without the Fed raising rates significantly, if at all.
- Rather, these recessions followed the old inflationary Boom followed by the deflationary Bust cycle.
- In particular, sharp spikes in both prices and wages in 1947 led to consumer stagnation in 1948 and a production downturn caused by an inventory overhand in 1949.
- Our present situation shows many resemblances, but a few important differences, compared with that event.
For further details see:
The Inflationary Recession Of 1949 And Its Lessons For 2022