More on Wall Street now see yield curve inversion fast approaching
Analysts mixed on whether reliable recession indicator
According to a survey reported Thursday, forecasts of a yield curve inversion in the US are growing on Wall Street.
The majority of analysts surveyed by Bloomberg over the past week see the curve from two to ten years inverting at some point in the next two years. Four out of the eleven respondents say it will happen next year.
Heightened expectations that this traditional bellwether of recession is on the horizon were underscored by St Louis Fed President James Bullard on Friday when he warned that the material risk of the “bearish signal” deserves “market and policy maker attention.”
Despite the conventional wisdom, survey respondents had differing opinions on what the development means. Those who still see yield curve inversion as a reliable indicator will be positioning for a recession in the coming years as higher rates stymie economic growth. Others will just want to bet against short-dated bonds.
Of those who see an inversion coming, the range of forecasts has it coming as early as March of next year or as late as 2019.