December 3, 2024 ☼ Economy

The 2-year/10-year spread is what I always look to prepare for a recession. I don’t believe in “soft landings” but I do believe financial chicanery can postpone a recession. With Trump getting back into office he’ll pursue cutting interest rates. That’ll give the economy a jolt in the arm until inflation catches up.

December 2024 2yr/10yr Treasury Spread

So who knows when the recession will happen, but it will. Of course, it’s easy for me to say that a recession will happen after a big Bull Market run, just like it’s easy to say that a Bull Market will happen right after a Bear Market.

It feels like we’re just rearranging deck chairs on the Titanic!

Update

I added in the jobless rates to the 2-year/10-year spread with recessions overlaid. Jobless rates are a lagging indicator, so watching them rise up is going to be the thing that tip us over into a recession.

December 2024 2yr/10yr Treasury Spread with Jobless Rates