> It was, therefore, just a matter of time before the discovery that inverted yield curves often anticipate recessions resulted in the world’s first yield-curve induced panic
This is backwards from what I understand. It's the bond market pricing in an economic downturn (lowering of interest rates in the medium term)that inverts the yield curve. The yield curve is how the bond market "speaks". The author seems to be implying the yield curve is some kind of enigmatic, second-order effect not an explicit result of the bond markets view of the economy.
This is backwards from what I understand. It's the bond market pricing in an economic downturn (lowering of interest rates in the medium term)that inverts the yield curve. The yield curve is how the bond market "speaks". The author seems to be implying the yield curve is some kind of enigmatic, second-order effect not an explicit result of the bond markets view of the economy.