According to B. Riley Wealth’s chief investment strategist Paul Dietrich, the inverted Treasury yield curve has been a reliable recession indicator for over 18 months. This occurs when the yield on the 2-year US Treasury exceeds that of the 10-year Treasury. Since 1955, an inversion in the 2-10 Treasury spread has accurately predicted every recession. The yield curve has been flashing this warning since November 2022, coinciding with B. Riley’s leading economic indicators pointing towards an imminent recession.
While some economists have toned down their recession warnings, Dietrich predicts a return to recession calls within the next six months. He cautions against those claiming a new bull market is starting and that a recession can be avoided this time. Despite his bearish outlook, Dietrich maintains that historically, recessions can take up to 28 months to officially begin after being signaled by the yield curve and leading indicators.
Additionally, stocks appear to be overdue for a correction, as the US is currently in the midst of its longest-ever secular bull market spanning 15 years. This suggests that investors should prepare for potential economic downturns in the near future and remain skeptical of optimistic forecasts that may not be accurate based on historical indicators.
In conclusion, while the US economy has displayed resilience, Dietrich warns that a recession is imminent based on historical indicators such as the inverted Treasury yield curve and leading economic indicators pointing towards an imminent recession. Investors should remain prepared for potential economic downturns and avoid any hype about new bull markets or predictions of avoiding a recession this time around.
A new study published in Nature Food highlights the health risks posed by emissions from…
Atlanta Federal Reserve Bank President Raphael Bostic believes that the battle against inflation will continue…
Alexandria's 2024 Small Business Resiliency (SBR) Grant program is set to provide $7,000 in assistance…
The recent victory of Xander Schauffele at the PGA Championship has catapulted him to the…
On May 22, 2024, at Caltech's Beckman Auditorium in Pasadena, CA, Carver Mead, a microelectronics…
On Monday, a technology company made a significant announcement regarding its financing arrangement with a…