Treasury bond yields are predicting an economic recovery

Treasury bond yields predict a near-zero probability that we will be in a recession 12 months from now:


When the Treasury yield curve is steep (long-term rates much higher than short-term rates), it suggests a strong economy going forward. When the Treasury yield curve is inverted (long-term rates lower than short-term rates), it suggests a recession ahead.

In late 2006 and early 2007, the yield curve became inverted. At the time, many pundits suggested that because of unique conditions, it may be a false positive. These pundits turned out to be very wrong. Now when pundits suggest that because of unique conditions, the currently steep yield curve may be a false positive, I am not inclined to believe them.

Don't argue with the yield curve.