Why the yield curve inversion might not signal a recession

The economy has become a lot less predictable

Yield curves.
(Image credit: Illustrated | thomaslenne/iStock, Federal Reserve Bank of St. Louis)

One of the economy's most reliable warning lights started flashing more frantically last week. Returns on three-month Treasuries pulled even with returns on 10-year Treasuries: the arrival of the dreaded inverted yield curve. For the last half century, recessions come a year-and-a-half or so after a yield curve inversion, basically like clockwork.

But will this indicator always be reliable? Or could the warning system break down?

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