Yellen Tells Investors Not to Fear the Flattening Yield Curve
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Federal Reserve Chair Janet Yellen isn’t among those losing sleep over the flattening U.S. yield curve.
By just about every measure the curve is the flattest in a decade after a relentless one-way trade over the past few months, sparking warnings by some investors of an impending economic slowdown. The spread between short- and long-term Treasury yields has dropped below zero ahead of each of the past seven recessions. In her last scheduled press conference as Fed chair, Yellen acknowledged the relationship between inversions and economic slowdowns, but offered some (cliche) advice to traders: “correlation is not causation.”