Inversion that matters…crossed 0 in April. This time 10-2y won’t happen as 2y treasury is falling faster than bonds. Hence, there’s a much bigger run to cash than before which implies liquidity crunches. Once it reaches -1.0 …liquidity crunches for sure.
When fed drops rates….recession is around the corner:
- 2000 rate drop Jan…recession start 2 months later.
- 2007 rate drop Aug…recession start 5 months later.
Credit Flow Investor 