Inverted Yield Curve in 2018? Perhaps, If Fed Keeps Up This Pace
Blanchard: U.S. Can Be More Relaxed About Rate Path
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An inverted yield curve, a clear sign investors see an impending recession, may be just around the corner. And it’s all thanks to the Federal Reserve’s resolve to stick to its tightening path.
That’s the view of Lacy Hunt, chief economist at Hoisington Investment Management. A bond bull since 1990, he sees the Fed playing a dangerous game as it starts to unwind its $4.5 trillion balance sheet. It’s a move that Hunt says will likely choke off credit growth and curb excess reserves, slowing the economy and suppressing inflation, which is already stubbornly low.