Economists Question the Recession-Predicting Power of the Inverted Yield Curve

The inverted yield curve, historically a harbinger of recessions, is losing its clout as a predictive tool, suggest the insights from a recent Reuters poll of market strategists. Traditionally, a negative spread between 2-year and 10-year U.S. Treasury yields has been viewed as a strong indicator of impending economic downturns, with a near-perfect track record since 1955, failing only once. However, despite an inversion lasting over 20 months and a current discrepancy of 46 basis points, the conversation among experts has shifted towards a lesser likelihood of a recession or even potential economic growth.