Is a U.S. Recession Imminent? Not So Fast, Says U.S. Treasury Secretary Janet Yellen
If the U.S. economy does tip into a recession, it will have been one of the most telegraphed events in history. The yield curve for Treasury bonds has now been inverted for months. When the yield on short-term bonds is higher than the yield on long-term bonds, it has been a very reliable indicator in the past that a recession will be declared in the next 12-18 months. At least that's how it normally works.
But nothing over the last few years of economic activity has been normal. Especially when factoring in things like the pandemic, quantitative easing, regional war in Europe, and now quantitative tightening, fiscal stimulus, and a short-lived regional banking crisis. Also, it's important to note that recessions are rarely caused by the same dynamics.
Given all this uniqueness, is it possible that the U.S. does avoid a seemingly obvious imminent recession? It very well might be, according to U.S. Treasury Secretary Janet Yellen.
Source Fool.com
