American bond and currency markets signal a global recession
Another record inflation reading against the backdrop of a tight labor market and rising food and goods prices will, despite the recent declines in oil and therefore gasoline prices, leave the Fed with no choice but to continue raising rates aggressively, even if it does. risk of pushing interest rates up. US economy into recession. In fact, the drop in oil prices – dropping below $100 a barrel on Tuesday for the first time since dropping briefly below that level in April – also reflects the view among traders in commodity markets that a recession and falling demand are imminent. . With inflation at an unprecedented rate and such a raw tool monetary policy, it is almost inevitable that [Fed] must induce a recession to try to control inflation. There are those, including the Fed, who believe that a two-year/10-year inversion, because of their imperfect record in predicting a recession, is less useful as a guide to the economy’s future than a three-month/10-year yield relationship...
