...yield curve un-inversion has always been associated with a recession and we are well on our way.
...but recent economic data, Fedspeak and narrative have all discounted prospect of recession.
...which makes it worse for the markets if they are all wrong, perhaps because of event(s) that have yet to unfold that could flip the economy in an already slippery slope down very quickly.
Spreads are widening yet again this week, with the 30y yield blowing out and bringing the crucial 30y:2y spread closer to the historical danger zone...As shown on the chart, the last 4/4 times this happened since 1990, it correlated with SPX crashing anywhere from 20-57%. Monthly attached here. See daily chart posted separately for granular look at the current bull-flag pattern playing out on that spread.
