Inversion in interest rates is not a media creation, and nothing to sneeze at. It just means bond investors are seeing slowdown ahead and willing to accept lower long term rates.
Debt at all levels (government, student, mortgages, personal) is very high. This is a worrisome backdrop in view of the inverting yield curves.
Any stock market downturn and a corresponding deterioration in the ‘wealth effect’ could spark a sell off. Of course, the Fed could always lower rates again and the trade tariff situation could improve, but stocks are still at high valuations and it wouldn’t take much to trigger a “risk off” sentiment.
“Inversion in interest rates is not a media creation, and nothing to sneeze at. “
No, it’s a Fed Reserve creation. The Fed kept the rate high while other countries set their’s to near zero or even negative. So investors in those countries purchase US Treasuries driving the yield down and, now “signaling recession”.
If/when the Fed cuts rates in Sept and October the bond purchases will subside and yield will increase reversing the ‘recession signal’. This is why Trump is brow beating the Fed for keeping interest rates high while the rest of the world is near zero. It causes them to buy US treasuries, lowering the yields and pushing the stock market to selloff. Hence some ppl referring to it as a manufactured crisis.