Published Sat, 23 Mar 2019 07:12:40 -0400 on Seeking Alpha
The Financial Times reports that the yield curve inverted, albeit by just 1 basis point:
Does this mean a recession is more likely than before?
Does this mean that a recession is likely in the next 12 months?
Does this mean that monetary policy is too tight?
Hard to say.
In my view, the current situation reminds me most closely of 1998, when the US economy was pretty strong at a time when the global economy was weakening. That year also saw a mild inversion, which turned out to be an incorrect recession forecast:
Ah, more reassuring
In its entire history, the US has never experienced a soft landing, in the sense of having a recovery extend for many years after unemployment had fallen close to the natural rate. Since unemployment has fallen close to the natural rate, that fact alone should make us worried. On the other hand:
Australia and the UK have experienced soft landings in recent decades. In previous US expansions, you didn't have MMs beating the drum for stable NGDP growth, level targeting. (Yes, I'm joking.) When unemployment falls to the natural rate, problems are almost always just around the corner. In 1966, the yield curve inverted when unemployment fell below 4%, and again there was no recession. But there was a problem just around the corner - high inflation.
So low unemployment is a very dangerous time for the US. We are a clumsy country, which fails to achieve soft landings. That's the real... Read more
|Stock name||Last trade||P/E||Earnings/Share||Dividend/Share||Dividend yield|
|CORNERSTONE TOTAL RETURN FUND||12.03||0.0||0.00||2.60||21.94|
|LIBERTY ALL STAR EQUITY FUND||6.44||0.0||0.00||0.82||10.19|
|SPDR DOW JONES INDUSTRIAL AVERAGE ETF TRUST||265.92||0.0||0.00||5.42||2.05|
|SPDR S&P 500 ETF||292.23||0.0||0.00||5.24||1.80|
|PROSHARES ULTRASHORT S&P 500||31.23||0.0||0.00||0.00||1.16|
|PROSHARES ULTRAPRO SHORT S&P 500||28.66||0.0||0.00||0.00||1.16|
|POWERSHARES QQQ TRUST SERIES 1||189.71||0.0||0.00||1.45||0.77|
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