There she goes… US Treasury yield curve – a leading recession indicator – goes negative for the first time since 2007.
…taking equities down with it, the day after a big spike on trade relief.https://t.co/Vc5ueqVUOH
— Kayla Tausche (@kaylatausche) August 14, 2019
Damn, this is pretty bad.
Courtessy of Common Dreams:
Warning signs that the U.S. economy could be barreling toward a recession quickly became alarm bells Wednesday after the Treasury bond yield curve—a key indicator that has preceded every major downturn over the past five decades—inverted for the first time since the Wall Street crash of 2007.
As the Washington Post reported, “the yields on short-term U.S. bonds eclipsed those of long-term bonds” on Wednesday, a phenomenon that “suggests investors’ faith in the economy is faltering.”
Chris Rupkey, chief financial economist at MUFG Union Bank, told the Post that “yield curves are all crying timber that a recession is almost a reality, and investors are tripping over themselves to get out of the way.”
Economists and other commentators were quick to place at least some of the blame for worsening market volatility on President Donald Trump’s trade war with China, the world’s second-largest economy behind the U.S.
Though Trump sparked a brief rally on Tuesday with his decision to delay his planned 10 percent tariffs on Chinese goods until Dec. 15, markets tanked again Wednesday in response to the inverted yield curve, wiping out the previous day’s gains and triggering fears that a major recession could be imminent.
A recession is bad news for all of us.
However Donald Trump should fear one more than anybody else, because it will completely derail his bid for reelection.
Trump’s entire 2020 strategy is to take credit for the strong economy that President Obama left him.
But if shit hits the fan this far into his presidency the only person he will have to blame is himself.
Yeah I know, he will never accept the blame.
But even if he blames members of his own cabinet those are still his people and ultimately it is still his fault.
In short, if this recession happens Donald Trump is fucked.