More on the Yield Curve and Helping Ukraine

Breathless Reporting

An Inverted Yield Curve Is Just a Fever

Early Predictor

Recession Probability

A Little Time

Ukraine Refugees Need Help!

It’s Easter weekend, so we are going to revisit a 2018 letter about the yield curve. The yield curve is much misunderstood and misused by many analysts. This letter will give you the tools to understand the correct importance and relevance of the yield curve. And then, a few comments about Ukraine.

First, a reminder it’s just over two weeks until the beginning of the SIC 2022! I hope you’re as excited as I am. If you haven’t ordered your Virtual Pass yet, I suggest you do so now.

We have over 50 speakers now, including big names like Joe Lonsdale (Palantir), Cathie Wood (ARK Invest), Ron and Michael Baron (Baron Funds), Ross Perot Jr., Niall Ferguson, Tom Hoenig (formerly FDIC and Kansas City Fed), strategist and pollster Frank Luntz, and many more. We’re also working on a special surprise guest whom I can’t tell you about yet, but suffice it to say, every American knows his name.

If you want to know where US inflation and the Russia-Ukraine war are going, where to find hidden gems to invest in right now, or what the Fed will likely do next, you should join us from May 2–13 (on six alternating days). Even if you can’t watch live all six days, every presentation and panel session will be recorded for you and made available after the conference, together with transcripts and presenter slides (as available). Click here to get your Virtual Pass now.

I wrote the following in December 2018, originally titled The Misunderstood Flattening Yield Curve. Some of it is out of date now but still informative. I’ve added a few new comments in [brackets]. With that, let’s jump right in.


Everybody is suddenly talking about the inverted yield curve. They’re right to do so, too, but alarm bells may be premature. Inversion is a historically reliable but early recession indicator. The yield curve isn’t saying recession is imminent, even if it were fully inverted, which it is not.

What we see now is really more of a flattened yield curve, with a smaller but still positive spread between short-term and long-term interest rates. That’s not normal, but it’s also not a recession guarantee. However, when we combine this with assorted other events, it adds to the concerns.

I’ve been writing in this letter about the negative yield curve since 2000 when the inverted yield curve said there was a recession in our future, and I called a bear market in equities. Ditto for 2006, though at that time, the yield curve inverted long before the stock market turned. Today, we’ll look at what the yield curve is really telling us.