Former Fed Chair Janet Yellen said in a conference in Hong Kong that yield curve inversion doesn’t indicate recession in the US economy ahead. Rather, the development suggests that Fed might need to cut interest rate.
Simply, put she said “my own answer is no, I don’t see it as a signal of recession”. She explained, “in contrast to times past, there’s a tendency now for the yield curve to be very flat”. Thus, it’s now easier for it to invert.
On the other hand, Yellen said “it might signal that the Fed would at some point need to cut rates, but it certainly doesn’t signal that this is a set of developments that would necessarily cause a recession.”
