A notorious recession indicator says that an economic downturn will begin this quarter, Bank of America says
The bond market's notorious recession indicator has flashed signs of an incoming downturn for months – and history says it's sending a warning to markets that a downturn could kick of this quarter, according to Bank of America strategists.
The analysts say that historically, a recession kicks off six months after the inversion of the 2-10 year curve. Given that those bond yields inverted in November of last year, the recession should be arriving in May. . The inversion steepened in March as the collapse of Silicon Valley Bank unfolded, a move that market can interpret as a major omen for the US economy, the BofA analysts said.
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