MidasAlgo

Inverted Yield US10Y-US02Y

Short
==Late 1970s to Early 1980s:
Yield Curve Inversion: The yield curve inverted several times between the late 1970s and early 1980s.
Economic Outcome: The U.S. experienced two recessions during this period: one in 1980 and another in 1981-1982.
Stock Market Outcome: The stock market faced significant volatility, with the Dow Jones Industrial Average (DJIA) experiencing declines during these recessions.
==Late 1980s:
Yield Curve Inversion: The yield curve inverted in late 1988 and early 1989.
Economic Outcome: This inversion was followed by a mild recession in 1990.
Stock Market Outcome: The stock market faced a downturn in 1990, with the DJIA dropping by around 20%.
==Late 1990s to Early 2000s:
Yield Curve Inversion: The yield curve inverted in 2000.
Economic Outcome: The U.S. entered a recession in 2001, partly due to the bursting of the dot-com bubble.
Stock Market Outcome: The stock market began a decline in 2000, with the tech-heavy NASDAQ Composite Index dropping significantly due to the collapse of many internet-based companies.
==2006-2007:
Yield Curve Inversion: The yield curve inverted in late 2006 and remained inverted into 2007.
Economic Outcome: The Great Recession began in December 2007 and lasted until June 2009, triggered by a housing market crash and subsequent financial crisis.
Stock Market Outcome: The stock market experienced a significant decline, with the DJIA losing more than 50% of its value from its peak in 2007 to its trough in 2009.
==2019:
Yield Curve Inversion: The yield curve inverted in August 2019.
Economic Outcome: While many analysts were concerned about a potential recession, the U.S. economy remained resilient in 2019 and early 2020. However, the unforeseen COVID-19 pandemic in 2020 led to a global economic downturn.
Stock Market Outcome: The stock market faced a sharp decline in early 2020 due to the pandemic, with the DJIA dropping by over 30% in a matter of weeks.
It's essential to note that while the inverted yield curve has been a reliable predictor of recessions in the past, the exact timing between the inversion and the onset of a recession can vary. Additionally, other factors, such as global events, fiscal policies, and technological shifts, can also play significant roles in economic outcomes.

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