Treasury Yield Curves – Is This Inversion Different?

The current scenario of inverted yield curves and tight credit spreads is likely to exacerbate the decline in lending, raising concerns about an impending recession. Based on historical patterns, a recession could strike as early as Thanksgiving, reflecting the typical 16-month timeframe from inversion to economic downturn. It is crucial to be cautious and acknowledge the unprecedented economic impact of the pandemic recession and recovery. Despite the likelihood of a recession, the lingering effects of previous stimulus measures on the economy remain uncertain and difficult to assess, adding to the gloomy outlook.