Recession | iMarketSignals

Posted on Aug 5, 2022 by Anton Vrba — No Comments ↓

Prior to recession the yield curve becomes inverted, as indicated by the Forward Rate Ratio between the 2-year and 10-year U.S. Treasury yields (FRR2-10) being less than 1.00.
The FRR2-10 crosses 1.000 downward signifying that US economic activity is in the boom phase of the business cycle, nearing the next recession.
The average lead time after FRR2-10 becomes less than 1.00 to the subsequent recession start was 14 months for the seven of the eight last recessions.

Posted on May 26, 2015 by Georg Vrba — 3 Comments ↓

Prior to recession the yield curve becomes inverted, as indicated by the Forward Rate Ratio between the 2-year and 10-year U.S. Treasury yields (FRR2-10) being less than 1.00.
Currently the FRR2-10 is about 1.20 signifying that US economic activity is in the expansion phase of the business cycle, far away from the next recession.
When FRR2-10 falls to near 1.00 the transition from expansion to boom occurs. For the last seven recessions the average lead time after FRR2-10 becomes less than 1.00 was 14 months.