Founder of Yield-Curve Indicator Says Recession Odds Are Rising
- Scope of yield-curve inversion ‘unprecedented,’ Harvey says
- ‘This is perhaps the lull before the storm,’ he says
This article is for subscribers only.
The odds of a US downturn are rising because the Federal Reserve has already pushed interest rates high enough to stall the economy, according to Campbell Harvey, who is well known for his research on the yield curve as a recession indicator.
The likelihood of a soft landing has given way to increased risk of an economic contraction, Harvey, a Duke University finance professor and director of research at Research Affiliates, wrote in a new report. The damage of the Fed’s hiking cycle has already been wrought, he argues, and many investors and economists are currently viewing the state of things with rose-colored glasses.