“5 Important Economic Metrics to Know”

At US News, Simon Constable writes on five economic metrics you should know. Here’s a sample:

The yield curve. A good predictor of whether economy is about to enter a recession is the difference between the yields of the 2- and 10-year U.S. Treasurys.

“When it’s gone negative – the 2-year is higher than the 10-year – that’s often been an early warning sign of a recession,” says Eddy Elfenbein, author of the Crossing Wall Street blog. “It’s been a much better forecaster than a lot of highly paid Wall Street economists.”

The 10-year T-note is yielding 2.42 percent and the 2-year is yielding 1.21 percent. That means the current difference between the yields of the two bonds is a positive 1.21 percent. “Which means we are in the safe zone, for now,” Elfenbein says.

I agree with myself. Note how the spread has gone negative before recessions (the gray areas).

Posted by on January 10th, 2017 at 2:31 pm

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