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Article: Does the yield curve signal recession?(Author abstract)
- Article from:
- Economic Commentary (Cleveland)
- Article date:
- April 15, 2006
- Author:
CopyrightCOPYRIGHT 2006 Federal Reserve Bank of Cleveland. This material is published under license from the publisher through the Gale Group, Farmington Hills, Michigan. All inquiries regarding rights should be directed to the Gale Group. (Hide copyright information)
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Predicting the future has always fascinated humans, and economic forecasting doubles the interest by adding a chance to turn a profit. One popular forecasting tool--the yield curve--has made headlines lately because it may be predicting a recession. Though traditionally among the most accurate of economic forecasting instruments, the yield curve is at odds with many other current predictions. So what is this yield curve, in what sense is it predicting a recession, and why are others skeptical of this prediction?
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