Stocks tank as another recession warning surfaces
The Washington Post | Wed, Aug 14, 2019
by Thomas Heath , Taylor Telford and Damian Paletta
U.S. stocks tumbled at open Wednesday after the inverted yield curve, one of the most reliable indicators of a recession, sparked a new wave of investor fears, erasing the short-lived bump from Tuesday’s trade easing.
For the first time since 2007, the yields on short-term U.S. bonds eclipsed those of long-term bonds. This phenomenon, which suggests investors’ faith in the economy is faltering, has preceded every recession in the past 50 years. It isn’t a sure thing, but it’s one of the more reliable signs that something is amiss in the economy. Recessions typically come within 18 to 24 months after the yield curve inverts, according to research from Credit Suisse.