Powell’s Bond Market Recession Indicator Is Sending a Warning

“Rates markets pricing in 2023 Fed rate cuts imply the market is expecting the Fed to pivot on rising recession risks,” said Prashant Newnaha, a strategist at TD Securities in Singapore. However, with official inflation data yet to confirm a peak, the Fed is likely to maintain its war on inflation despite signs the US and European economies are slowing, and this should see curves flatten further, he said.

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