Recession Warnings Rise, Limiting The Fed’s Inflation Fight

Shoppers are seen inside a supermarket in Chevy Chase, Maryland on February 17, 2022. - US retail sales boomed in January as shops more than regained ground lost in an unexpected December slump, despite high inflation, according to government data released February 16. Retail sales rose 3.8 percent last month, the Commerce Department said, double what was expected and a dramatic reversal of the 2.5 percent decline in December, which was worse than originally reported. (Photo by MANDEL NGAN / AFP) Photo by MANDEL NGAN/AFP via Getty Images

Commentary 

Recession warnings are clearly on the rise. Much of the initial media fervor focuses on the inversion of the yield curve.

“The 2-year and 10-year Treasury yields inverted for the first time since 2019 on Thursday, sending a possible warning signal that a recession could be on the horizon.” - CNBC

Of course, investors, analysts, and economists continue to debate the meaning of the 2-year/10-year yield-curve inversion. Since 1978, yield curve inversions consistently provide recession warnings.