Hedge Fund manager Gundlach says yield curve inversion is worsening – „rough road ahead”

Gundlach, hedge fund DoubleLine Founder, on the Twitter:

The 2-year 10-year yield curve inversion is gaining steam. At 36 basis points right now. Rough road ahead.

The inversion is used as a sign of an approaching recession. Recent data from the US showed two consecutive quarters of negative GDP, which is a commonly accepted definition of a recession. The US does not, officially, use the 'two consecutive quarters of GDP shrinkage’ definition though. The US has its own recession dating committee, the National Bureau of Economic Research (NBER). They look across a number of economic indicators, including employment and industrial production, not just GDP. Given the strength in US employment the NBER will not be calling a H1 2022 recession. Additionally, there are a large number of economists expecting the Q1 (and therefore H1) figure to be revised higher in the future.

James Rogers

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