Jason Smith — Yield curve inversion and a future recession

Summary:
Looking at the recent data and assuming the dynamic equilibrium model is correct along with a linear trend in rate increases, we see that the indicator will enter the error band sometime before 2020:… However, the period of time the spread spends inside that error band ranges from a few months to a year (yield curve inversion is usually described as being an indicator a recession will happen within a year). So unless we have other data, we won't be able to predict the timing of this future recession. We do have other indicators, and this extrapolation is consistent with them. Information Transfer EconomicsYield curve inversion and a future recessionJason Smith

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