Historical analysis shows that stocks typically have another 18 months to rally after an inversion before equity markets turn lower.
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and sent stock futures reeling as traders bet this was the reliable recession indicator and the one to watch. The market rallies more than 15% on average in the 18 months following the inversion, only thereafter turning downward. Sequential losses can start to add up after 18 months, Golub's analysis showed. Yields fall as bond prices rise.
"The BofAML US Economics team suggests that recession risks are rising. The 3-month T-Bill vs the 10-year T-Note curve has already inverted and the risk is that the 2s10s curve inverts as well," BofA technical strategist Stephen Suttmeier.
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