🇺🇸 Recession The probability of US recession in 12 months, calculated from the yield curve, stands at 11.4%, leaving the expansion narrative firmly in play. For now, the cycle still has legs 👉 #yieldcurve# #economy# #GDP# #growth# #economics# #recession#

Yield curve control does not get announced. It gets telegraphed. Asked what the signs would be, the answer on The Income Show starts with the direct ones: Bessent or Warsh saying out loud that it is needed, or headlines about bond market dysfunction. But the tell he actually tracks is bond volatility. "What I watch for specifically is the MOVE index." When it spikes too high, someone comes out and talks the bond market back down. These days that talk sounds like a Persian Gulf peace deal landing any day now. Here is what the talking is not fixing: "the long end of the curve is really starting to get away from these guys" And he does not think that is a glitch. The early 80s to 2021 was the bull market. What comes next, in his frame, is 40 to 50 years going the other way. "we are in the early years of a multi-decade bond bear market" Bonds stopped being the safe haven in 2021 and he does not expect them back in his lifetime. He puts the bottom around age 90 or 100. If he is right about the long end, which signal fires first: the MOVE spike, or an official saying it out loud? bitcoin:native @FormerDrJeff @IIICapital

The yield curve inverted, and no recession was declared, so people say the curve broke. Inversion was never a countdown clock to a committee declaring a recession. The shape of the curve tells you something about monetary and rate conditions. Treating it as a binary recession indicator throws away most of the information in it. More of this, in person, in October:

Why The Falling Yield Curve Is A Big Deal 🔊 On Wednesday's edition of The Macro Show, Hedgeye CEO @KeithMcCullough explained why a yield curve heading toward inversion matters and why he expects the Fed to end up panic cutting into the slowdown. "It's a signal that the economy is slowing." The US sits in Q3 2026 with GDP still running 3.5% to 4%, but a curve collapsing like this says growth is set to roll from here. The 10 and 30-year yields are not rising as fast as the Fed is taking the 2-year up. So the Fed keeps tightening into a slowing economy and perpetuates the slowdown. "They're going to start panic cutting interest rates." That is what happened in 2008, a different cycle running the same rhythm and rhyme, what McCullough calls a similar set in fractal math. Subscribe to The Macro Show for daily macro insights you won't find anywhere else:

McCullough: The Yield Curve Is The Biggest Problem Since 2022 🔊 On Tuesday's edition of The Macro Show, Hedgeye CEO @KeithMcCullough explained why the falling yield curve is the biggest macro problem since 2022 and why it is a reason to stay away from the financials. "It is probably the biggest problem we've seen since the beginning of 2022," the year Hedgeye called the crash after 2021's Quad 2 top. The sequence is the same, first Quad 2, then Quad 4, and the curve is now diving toward 19 basis points. It draws attention only once it turns negative, and by then the damage is done. On the way there, while stocks push higher, almost no one flags it. "Do not buy the financials on that," McCullough says. Subscribe to The Macro Show for daily macro insights you won't find anywhere else: