Sophisticates across the pundit and professional economic classes have been busy the past couple of days telling us an inverted yield curve means nothing.
Jeff Gundlach would beg to differ. Curve inversion (only at the short end for now, but coming soon to the 2-10 spread), says Gundlach, signals an economy "poised to weaken," and suggests "total bond market disbelief in the Fed's prior plans to raise rates through 2019."
The Fed, he says, needs to be careful in its communications. "There can’t be another screwup like last time, when they dropped 'accommodative' but simultaneously characterized the Fed Funds rate as 'a long way' from neutral."
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