Yield curve signals: do you still trust inversions?

The inverted yield curve predicted recessions for decades — then spent years inverted while growth continued. The signal's reputation has changed, and so has how traders use it.

Yield curve signals: do you still trust inversions? — pip movement diagram
How a pip moves the exchange rate

What's your view?

  • whether you treat inversion as a warning still
  • the alternative signals you've adopted
  • how the curve debate shapes your dollar view
Yield curve signals: do you still trust inversions? — risk-reward diagram
A risk-reward ratio of 1 to 2

Background: bond yields and exchange rates.

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