Our recommended reading today is a throwback to March 27, 2019, when we published Why We Won’t Panic Because the Yield Curve Inverted (And Neither Should You).
In that post, we shared a number of reasons why we advised against reading into a yield curve inversion too deeply. One reason we cited was that while a yield curve inversion had a strong track record of predicting recessions in the U.S. over the past 60 years, the evidence internationally was less convincing. Another reason was that using a yield-curve inversion as a market timing signal often led to underperformance, as markets often rallied for a significant period of time before recessions occurred. Revisit the full article here.