AS WE head towards the start of a new year, warning signs that the global economy is headed for a recession are flashing bright red. For one, the US Treasury yield curve remains deeply inverted, with both the 10-2-year as well as the 10-year to three-month Treasury spread sitting at -77 basis points and -83 basis points (as of Dec 4) respectively.
Historically, the shape of the yield curve is considered to be one of the most consistent and reliable indicators; it has predicted all five US recessions since 1980. Furthermore, the likelihood of a recession tends to be greater the deeper the inversion and the longer the curve stays inverted, a situation that we are experiencing today.
Aside from...
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