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Recession warning bell rings as yield curve inverts

Recession alarms have rung loud and clear this week with the key 10-year and two-year Treasury yield curve officially inverting. If you caught last week’s Bulletin, you’ll know that this was something that analysts had expected and now that it’s happened, there is a greater risk of a recession.

The curve hadn’t inverted since 2019 so it’s a worrying development when taken in conjunction with the hawkish Federal Reserve mandate to begin tightening monetary policy.

TD Securities noted, “The latest easing of tensions comes at a time when rates markets are readying for the Fed to deliver a hawkish surprise to markets… the yield curve may be bringing back whispers of a looming recession.”

As we have seen countless times, gold is exceptionally strong during periods of economic upheaval and uncertainty. Buy now.

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