BQ Blue’s special research section collates quality and in-depth equity and economy research reports from across India’s top brokerages, asset managers and research agencies. These reports offer BloombergQuint’s subscribers an opportunity to expand their understanding of companies, sectors and the economy.
ICICI Securities Report
The best predictor of U.S. recessions, the 10 year-two year treasury yield spread, turned negative (i.e., the yield curve inverted) on April 01, 2022 and remained negative the following trading day.
A U.S. recession has invariably followed within 24 months of the time this yield curve inverts. Despite the current strength of the U.S. economy (with the unemployment rate at 3.6% in March 2022, levels only exceeded in three months of the last 50 years), a U.S. recession is near-certain by March 2024.
A key reason why bond markets are predicting recession is because of the Fed’s policy error in persisting with quantitative easing until Feb-22 despite a tightening labour market, 5.7% real gross domestic product growth in CY21, and inflation more than double the official target of 2% YoY for core personal consumption expenditures.
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