The shock to markets that the inverted yield curve triggered is the most talked about topic in the US economic press. Now St Louis Federal Reserve President James Bullard has weighed in by saying, “The yield curve is inverted here. We`ve got one of the higher rates on the yield curve. That is not a good place to be.” This was a comment from an interview on CNBC with Steve Liesman at Jackson Hole. The so-called yield-curve inversion refers to the 10-year Treasury yield trading below its 2-year counterpart. This yield-curve inversion has predicted a long-line of recessions since 1945.
The concern, according to a variety of sources, is that the trade war and a global recession that could come with it, could take the US economy lower. Of course, President Trump has been tweeting to the people about the negative impact the Fed has on the economy. Some are now suggesting, along with Mr Bullard, that the Fed must cut rates 3 or 4 times by December. Bullard is a voting member of the Federal Open Market Committee, the FOMC.