What the Yield Curve Inversion is Signaling to Us
Marco Fragnito | Robert Fragnito
Friday’s market sell-off spurred on by an inversion in the yield curve has resulted in a barrage of commentary in the last few days. The significance of this signal is in its ability to forecast recessions. It is important for investors to remember the inversion must persist for months—not days—before it can be viewed as a reliable indicator.
We at MCF Capital Management felt the Federal Reserve was too tight in its monetary policy and expect the Fed to cut rates as early as the 3rd quarter of this year (See our Market Outlook 2019). With futures markets starting to price in an interest rate cut as early as September, we remain bullish on equity markets.
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