2019-09-19 15:30:00 Thu ET
federal reserve monetary policy treasury dollar employment inflation interest rate exchange rate macrofinance recession systemic risk economic growth central bank fomc greenback forward guidance euro capital global financial cycle credit cycle yield curve
U.S. yield curve inversion can be a sign but not a root cause of the next economic recession. Treasury yield curve inversion helps predict each of the U.S. recessions since the 1970s. However, no fundamental reason can help explain whether this inversion causes each recession. Correlation may not imply causation.
Many stock market analysts focus on the 3 root causes of an economic recession. First, the monetary authority tends to institute interest rate hikes to better contain inflation or money supply growth. A sustainable series of interest rate hikes help prevent macroeconomic instability; otherwise, high inflation would become a major source of economic disturbance.
Second, key energy prices often increase substantially in the dawn of an economic recession. Oil and natural gas prices tend to fluctuate due to geopolitical risks and military confrontations.
Third, stock market analysts would expect to see high unemployment, low capital investment, and low industrial production several months before a major recession. In this key alternative scenario, subpar labor and capital productivity can cause the economy to slide into at least 2 consecutive quarters of negative real GDP growth. Whether Treasury yield curve inversion serves as a sign but not a root cause of the next economic recession remains open to controversy.
If any of our AYA Analytica financial health memos (FHM), blog posts, ebooks, newsletters, and notifications etc, or any other form of online content curation, involves potential copyright concerns, please feel free to contact us at service@ayafintech.network so that we can remove relevant content in response to any such request within a reasonable time frame.
2022-02-15 14:41:00 Tuesday ET

Modern themes and insights in behavioral finance Lee, C.M., Shleifer, A., and Thaler, R.H. (1990). Anomalies: closed-end mutual funds. Journal
2020-10-06 09:31:00 Tuesday ET

Strategic managers envision lofty purposes to enjoy incremental consistent progress over time. Allison Rimm (2015) The joy of strategy: a bu
2019-09-05 09:26:00 Thursday ET

Yale macro economist Stephen Roach draws 3 major conclusions with respect to the Chinese long-run view of the current tech trade conflict with America. Firs
2019-10-03 17:39:00 Thursday ET

President Trump indicates that he would consider an interim Sino-American trade deal in lieu of a full trade agreement. The Trump administration defers high
2018-05-23 09:41:00 Wednesday ET

Many U.S. large public corporations spend their tax cuts on new dividend payout and share buyback but not on new job creation and R&D innovation. These
2025-04-30 08:27:00 Wednesday ET

The multiple layers of the world cloud Internet help expand what can be made digitally viable from electric vehicles (EV) and virtual reality (VR) headsets