Here’s one way to get a straight story on the yield curve’s distortions lately: go to the source.
More than three decades ago, Campbell Harvey discovered that when long-term Treasury yields fall below short-term yields, a recession typically follows. That relationship is preoccupying many investors right now after the market anomaly -- known as a curve inversion -- materialized toward the end of last year. The normally upward-sloping curve began developing kinks and, since then, various portions have flipped to negative and back, spurring debate about which is the most relevant indicator.
