Josh here - Okay, so now we're officially in recession. What happens next? How long will this go on for?
Last fall we had Professor Campbell Harvey, partner and senior advisor to Research Affiliates, on The Compound to discuss the inverted yield curve, an economic indicator he had discovered in the 1980's. Cam explained that this indicator - when Treasury interest rates on shorter-term bonds rise above those being paid on longer-dated bonds - has been successful at predicting recessions 7 out of 7 times with zero false signals along the way. This recession means it's now 8 for 8!
Join us for a discussion about the way the signal should be thought about now with the Fed's overnight rate back at zero. We also discuss whether or not the economy is bottoming, what has to happen for the recession to end, and why this environment is like nothing we've ever seen before in history.
Here is a link to Campbell Harvey's appearance last time, during which he accurately forecast a recession based on the yield curve indicator and other data points he was following:
https://www.youtube.com/watch?v=9sb1byR8Zx0&t=267s
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