The 10 Yr - 3 Mo yield curve — Campbell Harvey's original recession indicator, unblemished through eight cycles — inverted to nearly -200 bp in 2022 and held for two years. No recession came. We examine both inversion measures, trace the historical track record, and explain the four structural forces that overwhelmed the signal.
Tags: Yield Curve, Recession, 2s10s Spread, 3m10s Spread, Campbell Harvey, Inversion, False Positive, Federal Reserve, Term Premium, Fiscal Dominance, Monetary Policy, Treasury, Fixed Income, Economic Indicators, Soft Landing
What are implied forward rates and how do you read them? A practical guide to extracting market expectations from the yield curve, with interactive charts.
Tags: Forward Rates, Yield Curve, Treasury, Term Premium, Carry Trade, Fixed Income, Salomon Brothers, Expectations Hypothesis, Term Structure
Does adding gold to traditional stock-bond portfolios provide diversification?
Tags: AGG, Bonds, Correlation, Diversification, ETFs, GLD, Gold, IEF, IEI, Inflation, SHY, SPY, Stocks, TLH, TLT