As for the yield curve, the 2s10s has steepened and is no longer inverted. Does a steepening yield curve mean that a recession is delayed? Or does it mean the recession is already underway because the bond market has been incorrectly expecting lower bond yields and lower inflation?
I don't make macro trades based on "the economy" so I find recession talk mostly academic. It matters, but I don't care if the economy is in recession or not for trading, I care if the asset is a buy or a sell. Sectors, commodities and individual stocks move up and down for their own reasons. A bear market will be underway long before a recession is announced. A bull market will be long underway before most people realize the economy turned a corner. As I've argued in past posts, it's likely inflation already peaked if history follows the script from 2008-2020. The public outcry over inflation is itself a sign it has peaked. Whether a short-term or long-term peak remains to be seen. Weak growth can also devastate sectors of the economy for years on end. See commodities from 2011 to 2020. It wouldn't be shocking for unemployment to fall with real wages because people have to get a job, or take on another job, if they cannot afford food, housing or energy. That would be hellish for financial assets in general, it would get politicians ejected from office, yet it might not technically be a recession.
Conclusion: I don't see anything good coming from a steepening yield curve.
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