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The Indicator from Planet Money

The inverted yield curve is screaming RECESSION

The Indicator from Planet Money

NPR

Business

4.79.2K Ratings

🗓️ 4 April 2023

⏱️ 10 minutes

🧾️ Download transcript

Summary

There is one indicator that has predicted every recession since 1969, and that indicator is flashing red right now. It's the yield curve. But Mr. Yield Curve himself, Campbell Harvey, explains why this time he thinks his prediction could be wrong.

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Transcript

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0:00.0

NPR.

0:12.0

Is a recession coming?

0:14.0

Is a recession coming?

0:15.0

I mean, the question everybody has on their minds.

0:18.0

Two answer, that question.

0:20.0

We look at economic indicators on our show all the time.

0:24.0

And of all the economic indicators,

0:26.0

there is one that is predicted every recession since 1969 with no false positives.

0:32.0

That is a remarkable track record of economic doom predicting.

0:36.0

And maybe you guessed where we're going with this,

0:38.0

we're talking about the yield curve.

0:40.0

The yield curve.

0:42.0

That's right, we talk about it a lot on this podcast.

0:44.0

And the yield curve is flashing red right now.

0:48.0

It's going alert, alert.

0:50.0

I call that code red.

0:51.0

Campbell Harvey is the guy who discovered the yield curve's predictive powers.

0:56.0

If you don't know his name, you should.

0:58.0

So according to the model, the model says we will have a recession.

1:02.0

That is not good, Darian.

1:04.0

It's not good at all.

1:05.0

But hold on a second.

...

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