The yield curve recession signal is louder and louder. Inversions are persistent and growing.
Let's compare the spreads today to that of December 18, the start of the December 2018 FOMC meeting.
- Yellow: Spreads Collapsed Since October (1 Month to 5 Years)
- Pink: Spreads Remained Roughly the Same (7 Year)
- Blue: Spreads Increased (30-Year and 10-Year)
Something is happening. What is it?
- The bond market is staring to worry about trillion dollar deficits as far as the eye can see
- The bond market has stagflation worries
- The bond bull market is over or approaching
My take is number one and possibly all three.
And in regards to recession, the economy is weakening fast.
- Housing Starts: Yet Another Unexpected Thud, Down 11.2 Percent
- Home Resales: Existing Home Sales Down Again: -1.2% Month Over Month, -8.5% Year-Over-Year
- Industrial Production: Industrial Production Dives, Wiping Out a Strong December and Then Some
- Retail Sales: Shockingly Weak Retail Sales: Down 1.2% in December, Sharpest Decline Since 2009