With energy prices increasing rapidly, recessionary concerns are rising. In addition, another recessionary indicator, the, i.e., the difference between short-term government bond yields and long-term bond rates is narrowing, and investors worry that the yield curve could eventually invert. An inverted yield curve has often been a potential recession signal.
Furthermore, Goldman Sachs Group Inc. (GS) has downgraded its growth outlook for the United States economy and has raised the possibility of a recession. Jan Hatzius, GS’ chief economist, said, “And we now see the risk that the U.S. enters a recession during the next year as broadly in line with the 20% to 35% odds currently implied by models based on the slope of the yield curve.”
