There was plenty of talk about the inverted yield curve
last month, the scenario where 10-year Treasury yields creep above the yields on two-year notes, and that chatter is usually ominous in nature because the inverted yield curve
has often been a reliable recession indicator.
BThe yield curve
has been a reliable predictor of US recessions over the last four decades, less so in the UK.
Searches on Google for "inverted yield curve
" have spiked after the unusual bond market phenomenon presented itself last week for the first time in over 12 years and helped tank Wall Street amid chatter that an economic downturn was imminent.
Last week's inversion of the yield curve
in the US spooked markets.
Investors are spooked by a scenario known as the "inverted yield curve
," which occurs when the interest rates on short-term bonds are higher than the interest rates paid by long-term bonds.
The rout was worsened by the inversion of the yield curve
, whose apperance spooked investors into fleeing equities.
Our results were impacted by the shape of the yield curve
, competitive pressures in our markets, and the fact that our loan growth came near the end of the quarter.
More importantly, one of the most accurate recession indicators, known as the yield curve
, has recently been flashing warning signs.
Fossier said a yield curve
is simply a line chart of interest rates for government bonds, with interest rates on the left axis and maturities on the bottom axis.
This ripple effect of Aramco bonds has been seen in the repricing of the Saudi yield curve
and naturally this will tighten the yield curve
of Abu Dhabi and Kuwait as well.
One key early warning sign of a recession is when the yield curve
inverts, and that has happened recently in the US.
Treasury yield curve
at the start of December 2018 has since made its presence most felt on March 22, 2019.