Over the past year or so, there has been considerable talk about a recession. In early 2023, many economists believed there was a slightly better than 50 percent chance our economy would experience a mild recession with high inflation and rising interest rates. However, with inflation issues appearing to wane and interest rates holding steady, the impending recession has yet to come to fruition. In fact, the economy accelerated at the end of 2023 and is expected to continue that trend into early 2024.
We have had an inverted yield curve since October 2022. An inverted yield curve occurs when short-term interest rates exceed long-term rates, and it is widely considered a harbinger of a recession. Under normal circumstances, bonds with longer maturities typically carry higher interest rates than short-term bonds. Currently, the three-month Treasury bond yields around 5.35 percent, while the 10-year Treasury yields around 4.3 percent.
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