Wednesday morning, financial analysts at numerous news outlets and business centers sounded the alarm for what CNBC called “one big global recession.” This was largely due to the inversion of the so-called “yield curve.” As Jamie McGeever at Reuters explained it on Twitter, “the US 2s/10s yield curve inverts for the first time since 2007. This development has preceded every US recession over the past 45 years.” And sure enough, by the end of the day, the Dow plummeted 800 points before closing.
And there it is – the US 2s/10s yield curve inverts for the first time since 2007. This development has preceded every US recession over the past 45 years. pic.twitter.com/I7UAeuhzGf
— Jamie McGeever (@ReutersJamie) August 14, 2019
Of course, all of this may seem frightening to you, and it should be. The “Great Recession” that lasted from December 2007 through June 2009 was not a particularly wonderful time for the global economy. While President Trump responded to the increasingly dire economic news by ridiculing Federal Reserve Chairman Jerome Powell — the very many he appointed to the job — on Twitter, everyone else responded to the developing situation with a mixture of anger, confusion and concern.