• Current Events,  Mile High View

    Recession Indicator Flashing Red – Is it time to head to the exits?

    “Dow falls 460 as US Recession Indicator Flashing Red” reads a CNN Headline from last Friday. Is it time to head for the exits? Are we tumbling into a recession? The “bond vigilantes” are out in force waving the caution flags. But could there be another explanation? What is the red flag? The yield on 3-month treasuries is now higher than the yield on the 10 year treasury bond, a condition known as “inverted yield curve”. The yield curve is a graph of interest rates on the vertical axis and the length of time on the horizontal. In the past and inverted yield curve has correctly predicted 9 of the…