Global inverted Yield curves

Due to elevated levels of debt, on a global basis, but particularly in developed economies, and restrictive monetary policy by major central banks, we are seeing yield curves around the world being inverted. As you can see in the chart below, the US has had an inverted yield curve for most of 2022 (2yr-10yr). But there are 7 additional economies that present inverted yield curves as well. The reason why this is important is because it’s a good predictor (although not perfect) of economic recessions. In the recent past, only 3 economies presented negative curves at a time. Now, it’s 8.

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Source: Bespoke Investment Group