SOME see it as an almost surefire economic law: an inverted yield curve, when long-term bonds yield less than short-term debt, signals a coming recession.
That may not hold true in today's world of unprecedented central-bank economic intervention, according to Dan Ivascyn, Pacific Investment Management Co's (Pimco) group chief investment officer.
"There's a chance that this time around is very different," said Mr Ivascyn, who heads Pimco's US$1.51 trillion in investments. "We don't think the predictive powers of the yield curve are what they would've been in a world of less central-bank influence."
After the 2008 financial crisis, bond buying by policy makers in Europe, Japan and, until recently,...