Recession and Stagflation Discussions Open as Inverted Yield Curve Returns

The yield on the two-year Treasury note was higher than the yield on the 10-year Treasury note for the first time since 2019 on March 29, a market condition that many have noted as having preceded past recessions. CNN Business puts the odds of a recession next year as high as 35% citing interest rate increases and a change in Federal Reserve Policy, Russian invasion of Ukraine, and spiking consumer prices. In reference to the expected Fed interest rate increases, Moody’s Analytics chief economist Mark Zandi commented that, “The harder the Fed steps on the brakes, the higher the probability the car seizes up and the economy goes into recession.” Read more.