Inverted Yield Curve A hotly debated subject in the markets is the looming threat of inverted yield curve (difference between yields of short and long term treasury bills/notes). Inverted yield curve has successfully predicted the last 7 recessions since 1960. There are many experts who have argued that the current inverted yield curve doesn’t pose a risk to a decade old bull market. The reasons range from unusual demand for long term debt since European debt is yielding much lower or because US government is issuing more short term bills. Future of economy of course cannot be decided by one chart. Many leading indicators like global PMI, consumer/manufacturing confidence and others are positive and indicate continued growth in 2018. However, policy errors by FED could significantly invert the yield curve and we could be in recession. Of course, we will not know a year from now if there will be economic stagnation. Markets Lot of optimism generated from President Trump’s tax refo...