One wonders about the extent to which this correlation is a self-fulfilling prophesy. If everyone gets skittish when indicators look too good and reduce investment, they end up causing the recession that they predict!

An inverted yield curve isn't a random indicator to look for to bet on a recession... rather, it is a sign that the market has bet on a recession. Whether or not the market betting on a recession causes a recession is another question, but it is the skittishness that causes the indicator - so any time you see an inverted yield curve, investors have already become skittish and reduced investment targeted at certain dates.

reflexivity is a wonderful thing.

Thanks for this counterpoint, it provides solid context for the data!

It’s from the Federal Reserve, so people may discount it either from a belief the Fed doesn’t know what it’s doing, or a belief the Fed is biased in how it sees things.

But I was happy when it showed up recently. It provides a good explanation about the yield curve and a more specific way to look at things.

Also a correlation between low unemployment and past recessions. It's looking pretty grim...