M1 Money Supply vs. Yield Curve and Recessions Great chart showing the correlation between M1 money supply and the yield curve. The key factor for inverted yield curves is tight money. Picture source: BofA Merrill Lynch Global Research
U.S. 2s10s Yield Curve and Recessions since 1941 Since 1941, three recessions have occured without 2s10s yield curve inversion. The yield curve is a great recession indicator among others. Picture source: Deutsche Bank
Probability of U.S. Recession Calculated from the Yield Curve The probability of U.S. recession over the next 12 months, calculated from the yield curve, stands at 44.13%. Picture source: Federal Reserve Bank of Cleveland
ISM Manufacturing Index and U.S. Yield Curve Inversion This chart suggests that the ISM Manufacturing Index tends to trough 19 months after the U.S. (10Y-3M) yield curve inverts. Picture source: Pictet Asset Management
S&P 500 and U.S. 2s-10s Yield Curve This chart shows the S&P 500 percentage change (YoY) and the U.S. 2s-10s yield curve. Picture source: Morgan Stanley
S&P 500 Average Performance -2Y/+2Y with U.S. Yield Curve Inversion History tells us that on average, the S&P 500 peaks 42 weeks after (10Y-3M) yield curve inversion. Picture source: Pictet Asset Management
Time from 2s-10s Yield Curve Inversion until Recession Starts Recession tends to start in one to three years after the yield curve inversion. Keep in mind that the yield curve is only one indicator among others of an economic puzzle. Picture source: Deutsche Bank Global Research
Impact of an Inverted Yield Curve: S&P 500 and U.S. Dollar History tells us that the U.S. dollar and the S&P 500 could go higher, and the yield curve could stay inverted until mid-2020. Picture source: Nordea and Macrobond Click the Picture to Enlarge
Percentage of Inverted Yield Curves Across the Globe Now, nearly 25% of global 2s10s yield curves and nearly 10% of global 2s30s yield curves are inverted. Picture source: BofA Merrill Lynch
U.S. Yield Curve 1M to 30Y and Correlation Against Fed Funds Effective Rate According to the chart, a 75bp cut is required to normalize the term structure of interest rates. Picture source: Fundstrat Global Advisors, LLC
