Don't Freak Out about the Yield Curve

There are reasons to be concerned. The global economy is slowing. The US economy has slowed. Current policy (especially on trade) is a drag on growth. But I wouldn't freak out about the yield curve. In mid-1998 the spread between the 10 year and the 2 year went slightly negative, and a recession didn't start until 2001 - over 2 1/2 years later. Of course the Fed cut rates in 1998 - just like the current situation. When the spread turned solidly negative in 2000, the Fed was raising rates.   That would be a more concerning scenario. Also, with overall yields so low, I'm not sure this......(read more)

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