- Deep inversion broadly seen as signal of economic downturn
- Years of bond-buying has compressed term premium, says ECB
The European Central Bank cautioned against reading too much into a bond-market metric often regarded as a harbinger of recession.
The predictive power of an inverted yield curve — typically seen to herald a downturn — has been reduced in recent years by central bank bond buying, the ECB said in its account of its July monetary policy meeting.
Up Next
ECB Questions Power of Yield Curve Inversion as Recession Signal