- The economy just grew at a 3.2% clip, the best New Year since 2015 and right in line with the past 7-decade average;
- The jobs market hasn't been this strong in half-a-century;
- Household incomes have recovered and risen above pre-crisis levels;
- Mortgage rates are falling back towards the cheapest in history;
- The stock market has never been higher than it was at the start of this month.
"Research beginning in the late 1980s documents the empirical regularity that the slope of the yield curve is a reliable predictor of future real economic activity."Today, a substantial body of evidence exists..."
"The term spread, the spread between the yield on a long maturity bond and a short maturity bond, has been shown to have strong predictive power for future recessions...[because] when the term spread is particularly compressed [ie, the gap is zero or less] this tends to be associated with a recession in the subsequent 2-8 quarters."