For the past 50 years, every recession has been predicted by the yield curve.

The yield curve was once just a wonky graph for academics and policymakers. But in recent years it has become a way to forecast looming recessions. The curve has helped predict every recession over the past 50 years. That means the curve accurately predicted even largely unforeseen downturns like the dot-com bubble of 2001 and the Great Recession in 2007. As a result, news of yield curve inversions can now send markets tumbling. Policymakers keep a close eye on even small changes in the curve’s composition. So how did this simple graph showing U.S. Treasury bond interest rates grow into one of the most reliable recession indicators we have? And what does a yield curve inversion really mean? » Subscribe to CNBC: » Subscribe to CNBC TV: » Subscribe to CNBC Classic: About CNBC: From 'Wall Street' to 'Main Street' to award winning original documentaries and Reality TV series, CNBC has you covered. Experience special sneak peeks of your favorite shows, exclusive video and more. Connect with CNBC News Online Get the latest news: Follow CNBC on LinkedIn: Follow CNBC News on Facebook: Follow CNBC News on Twitter: Follow CNBC News on Instagram: #CNBC How The Yield Curve Predicted Every Recession For The Past 50 Years...(read more)

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The yield curve has been a reliable predictor of every recession for the past 50 years. The yield curve is a graph that shows the yields on bonds with different maturities. The most commonly used for analysis is the difference between the 10-year Treasury bond and the 2-year Treasury bond. A healthy economic cycle is characterized by a normal yield curve where long-term bonds have a higher yield than short-term bonds. This reflects the market's expectation that short-term interest rates will be lower in the future than they are today. However, when the yield curve becomes inverted, where short-term yields are higher than long-term yields, it is an indicator of an impending recession. This is because investors believe that short-term rates will be lower in the future, possibly due to a weakening economy, and are therefore willing to accept a lower yield on long-term bonds to lock in a higher return. The yield curve has predicted every recession in the past 50 years, including the 2008 financial crisis, the 2001 dot-com bubble burst, and the 1990-1991 recession. The inverted yield curve is a strong signal of an impending downturn, and it has been accurate in forecasting the timing of a recession in most cases. The Federal Reserve often closely monitors the yield curve as an indicator of economic health and to help guide monetary policy decisions. When an inverted yield curve occurs, the Fed may lower interest rates to stimulate the economy and prevent a recession. Some analysts argue that the yield curve may become less reliable as a predictor in the future, as global economic conditions and central bank policies become increasingly complex. However, the yield curve has been a consistent and useful tool for economic analysis and forecasting for the past 50 years. In conclusion, the yield curve is a powerful tool for predicting recessions and has been accurate in forecasting every downturn in the past 50 years. As economic conditions continue to evolve, the yield curve remains an important indicator for investors and policymakers to monitor. https://inflationprotection.org/for-the-past-50-years-every-recession-has-been-predicted-by-the-yield-curve/?feed_id=98757&_unique_id=6465de91ca618 #Inflation #Retirement #GoldIRA #Wealth #Investing #breakingnews #business #cable #cablenews #CNBC #financenews #financestock #financialnews #invertedyieldcurveexplained #money #moneytips #news #newschannel #newsstation #stockmarket #stockmarketnews #Stocks #thechartthatpredictsrecessions #usnews #whatisayieldcurve #worldnews #RecessionNews #breakingnews #business #cable #cablenews #CNBC #financenews #financestock #financialnews #invertedyieldcurveexplained #money #moneytips #news #newschannel #newsstation #stockmarket #stockmarketnews #Stocks #thechartthatpredictsrecessions #usnews #whatisayieldcurve #worldnews