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Tuesday, August 6, 2024

US 10Y - US 2Y Yields About To Cross Back Over The Zero-line - Recession Coming

US 10Y - US 2Y Yield


Every time we have seen an inverted yield-curve, that turns back above the zero-line the US economy enters into recession. We saw a reversion from the inverted yield-curve back to normal in 1989; 2001 and 2007. Every time a recession followed in the US. 

The US 10Y - US 2Y yield-curve has been inverted since July 2022 which is the longest period ever and it will likely trigger a serious economic recession in the US once the yield-curve break back above the zero-line. 

In physics we have the law of action and reaction. Newton's third law states that "For every action there is an equal and opposite reaction". As the central banks has printed money as there was no tomorrow, creating enormous wealth. We should expect and equal strong force destroying the wealth created.

I'm not saying the recession has begun or hard times for the economy has begun, as I expect the central banks will do almost everything in the power to obstruct economic hard times. What I'm saying is that the US is facing strong head-winds in the months to come and eventually will enter into a strong recession down the road.

Don't be on the wrong side of the coming downturn.      

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