Investors are alarmed to see longer-dated UK and US bonds trading at lower interest rates than shorter alternatives, a possible sign of recessionLatest: US yield curve inverts in `flashing light´ warningUK yield curve has also inverted - a worrying signAnalyst: Why yield curve inversion could herald recessionEarlier:Breaking: German GDP shrank 0.1% in April-JuneEconomists: Berlin should boost spending 2.14pm BST It´s worth remembering that an inverted yield curve doesn´t signal an immediate US recession - the downturn could be a year away.That would coincide with the next presidential election -- potentially undermining Donald Trump´s re-election bid.Assuming yield curve inversion is calling a recession in 12-18 months - that would put it slap bang in time for the 2020 US election -- can see why Trump keen on rate cuts 2.08pm BST The futures market is signalling a rough day on Wall Street, with the US benchmark stock indices called down at least 1.3% 2.02pm BST Economics professor Paul Krugman argues that the slump in government bond yields contains an important message -- politicians can, and should, borrow more to fund investment.As I wrote in yesterday`s newsletter (to which you should subscribe!), amateurs talk about stocks, but professionals study bond markets. As of this morning the bond market is basically begging governments to borrow: the US 10-year real rate just 0.02 percent 1/ pic.twitter.com/e44SX8Rvu7These low, low rates are telling us several things: (a) private investment demand is really weak despite tax cuts (b) recession risks are pretty high (c) infrastructure! I mean, with borrowing virtually free, why not fix all those falling-down bridges? 2/But not going to happen. One of my better takes early on was that the Trump infrastructure thing was never going to happen; sure enough, `infrastructure week` became a punchline, and now isn`t even that 3/ https://t.co/alnlqhyMBf 1.59pm BST Despite today´s market turmoil, office rental chain WeWork has ...
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