The bond market is signaling an economic slump, triggered by the interest rate hikes by the central banks.
(Photo: Reuters)
Dusseldorf A surprising banking crisis, a cooling labor market, a rising core inflation rate, weak data from domestic industry: fears of a recession are raging in the USA.
It has been clear since Wednesday: The US Federal Reserve (Fed) now also considers a “mild recession” in the country to be likely, as the minutes of the meeting at the end of March show. Such a scenario – i.e. two consecutive quarters of negative growth – in the world’s largest economy would cause renewed turmoil on the markets and increase uncertainty, especially since it is not priced in by a large number of market players. The consequences are likely to be felt across all asset classes and especially on the labor market.
One of the most reliable indicators of the post-war period also signals an impending recession: the inverted yield curve. If you believe the indications of the bond market, then the economic slump in the USA is imminent.
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