Monetary system analyst Rafi Farber makes a pretty convincing case that a recession is imminent, based on some recent action in the banking system and also by looking at the inverted yield curve (short term interest rates above longer term rates). In a nutshell, the recession occurs not when the yield curve inverts, but after it un-inverts and goes back to its normal upward slope. We’ll know if he’s right or not within a few months. Interestingly, he doesn’t see us bouncing back from this downturn.
“…we had an inverted yield curve until… June 2007… and from there it uninverted fully and we were in a recession by January 2008… 6 months…now we’re about to cross the threshold here again we’re at… four basis points below 0.04% means we could cross into positive territory any day….we’ve been negative since June 2022 right that for over a year now which is the longest we had a negative yield curve ever… we have a few months before this fully un inverts and we are back into the final recession of this monetary system…”