Control Panel: Happy days are here again! Right?

@DrBob2 , the chart that @SuisseBear posted isn’t a yield curve, strictly speaking. It’s a distillation of the Treasury yield curve, showing the difference between the 10 year Treasury and the 2 year Treasury.

Most of the time, the 10Y yield is higher than the 2 Y yield (a positively-sloped yield curve). However, look at the vertical gray lines that represent recessions – times that stocks usually fall in value.

The 10Y-2Y chart shows that the difference consistently becomes negative within a few months ahead of recessions. That is a clear predictor of falling stock prices.
Wendy

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