Retirement investing: Go for simplicity, low costs and risk control

OVER more than a year, an inverted US Treasuries yield curve has been interpreted as a harbinger of a US recession. However, in the past few weeks, the yield curve “un-inverted” to its normal shape, where short rates were lower than the long end.

A Wall Street Journal (WSJ) column raised this conundrum: A normal yield curve, it said, can also be “a sure-fire sign of recession”.

The column is symptomatic of today’s puzzling times, when mixed signals abound. The United States Federal Reserve raised interest rates at a rapid clip from mid-2022 to around 2023, in efforts to dampen soaring inflation. Conventional wisdom says that such an aggressive rate trajectory would induce a recession as the cost of debt and capital for businesses rise.