Is A Recession Coming?
A look at yield curves, the stock market, and the media’s freak-out over the state of the economy.
Recently, there have been rumbles that a recession is coming.
There are polls showing that a large number of economists believe a recession is on the horizon, reports of slowing economic growth, articles about how to prepare yourself for a bad economy, and even mentions of an “inverted yield curve” and how it means a downturn is inevitable.
It’s a mess of economic talk, criss-crossing evidence and conflicting opinions, and for a lay person, it’s hard to make sense of it all. This is an examination of whether it’s all smoke and noise, or if we really have something to worry about.
What’s an inverted yield curve?
If you’ve been paying attention to the news for the past couple weeks, you’ve likely heard about the inverted yield curve and how it means a recession is coming. For most people, however, it’s still not clear what it really is and why it means a recession, so that should be explained first.
The inverted yield curve relates to US Treasury bonds, which are loans the government gets from investors that are used to pay for government projects that aren’t covered by taxes.
