A recession warning is making the rounds following news that could be a negative sign for the economy.
Here’s what to know about the most recent recession warning.
- The news that has investors worried about the economy has to do with bond yield rates.
- This has bond yield rates for the two and 10 year ratios inverting.
- So what exactly does this mean for the economy?
- Well, it could be nothing, but there are concerns about it being a recession warning sign.
- This is due to a 2/10 bond yield inversion preceding ever major recession in history.
- However, it could be some time before investors actually see a recession.
- For example, the last time this happened before a recession was in 2005 and the recession didn’t start until 2007.
- This could also be a sign that investors will start investing even more into bonds are they prepare for a rocky economy.
- Some analysts are noting that they don’t expect this to lead to a recession in 2019 or the following year.
- Despite this, there are others that say this is a bad sign no matter what. Even if it doesn’t lead to a recession immediately.
- There are also concerns that the U.S. has never dealt with a recession while holding as much debt as it does currently.
- To top it off, the ongoing trade war with China could also have a negative impact if a recession starts.
As of this writing, William White did not hold a position in any of the aforementioned securities.