, Columnist
Yield Curve Tells the Fed to Hold on Rates
If this keeps up, a key recession warning indicator soon will be flashing red.
Pay attention.
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Imagine if you could predict recessions, years in advance, more accurately than professional economic forecasters, just by looking at a few data points. Well, according to a 2008 paper by economists Glenn Rudebusch and John Williams, you can.
The data you have to look at is what's known as the yield curve — a technical term for the different interest rates on government bonds of various maturities. Here’s what those interest rates look like right now: