The yield curve inversion, historically a reliable recession indicator that preceded all eight previous recessions over 60+ years, failed to predict a recession after inverting in late 2022. Despite this broken signal, the author argues recession risk remains and recommends maintaining long-term stock positions, citing strong corporate earnings and positive GDP growth as offsetting factors to rising inflation and interest rate concerns.
Axe note: The classic US yield curve recession indicator failed recently, but South Africa’s backdrop still points to caution.