@EddyFree :
Appreciate the smoke signal. Recovering from skin cancer surgery. I woN't post a picture of the 6" gash on my arm.
But, on to the subject at hand. The yield curve is a symptom.....not the disease. IMHO, the Fed has gone overboard in their tightening process. They needed to raise rates. They needed to shrink their balance sheets (aka sell Tbonds back into the market). But, they are prolly overdoing the Tbond resales at the present time.
The aftermath of quantitative easing measures that saw global central banks snap up government bonds may have robbed inversions of their reliability as a predictor. Since so many Treasurys are held by central banks, the yield can no longer be seen as market-driven.
It's a new day for this indicator, but I'd keep an eye on it. Anyone here beside me remember the Jimmy Carter years when the prime rate was 22% and 30 year mortgages were 18%. Now that is an inverted curve,
****edit****forgot one thing. This indicator is always accompanied by a rise in unemployment. Keep an eye on that.