Blog tagged as central banks

An Inverted Yield Curve Does Not Mean Imminent Recession

September 09, 2019 04:00 PM By alex.locker - Comment(s)
An Inverted Yield Curve Does Not Mean Imminent Recession

Economic growth and stock returns have been weaker one year later

MAIN POINTS


An inverted yield curve is not a sufficient condition for a U.S. recession.


Tight financial conditions and/or weakness in the services sector would increase recession risk more meaningfully.


Inversion has been followed by inc...

What a Fed Rate Cut Means for the Markets

August 19, 2019 11:35 AM By alex.locker - Comment(s)
What a Fed Rate Cut Means for the Markets

Stocks and bonds gain when Fed policy becomes more accomodative.

Main Points:

  • U.S. and international stock prices rise after a first Fed rate cut. Gains are strongest when there is no U.S. recession.


  • Bond prices consistently rise prior to an initial rate cut, but are stagnant afterwards.


  • Rate cuts can h...