The yield curve acts as a financial foghorn of sorts. Currently it is bellowing that something is drastically wrong.
As evidenced by earnings growth estimates for 2023, financial skippers are going about their business as if a recession is unlikely.
Yield curve foghorns are often unheeded by investors as they blow well before danger is apparent. As such many investors are unprepared when problems arise.
Today, the 10-year/3-month UST yield curve is at its most negative level since 1982.
Best,
Himalay Bhatia
