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Analysts at Rabobank explained that historically, inverted curves have been one of the best predictors of a recession in the short- to medium-term.  

Key Quotes:

“An inversion of the curve would therefore certainly hurt the FOMC’s – and the market’s – confidence, which may force them to take a pause. Only last week, St. Louis’ Bullard said that the “central bank’s policies are to blame” for curve flattening; Dallas’ Kaplan said that he doesn’t want “knowingly invert” the yield curve”; and Atlanta Fed President Bostic added to this that it’s “his job” to make sure that the yield curve doesn’t invert. We agree and therefore expect two more rate hikes this year: in June and September.”