Update on pre-recession signals in the US

In raising its policy rates, the Fed has created a situation of extreme yield curve inversion, which is normally a robust signal of recession. To date, the tightening of monetary policy has so far only significantly affected the construction sector. In this sector, production, demand and prices are down. Employment is likely to correct in the near future, which should reduce labour market pressures and perhaps also spread the weakness to the rest of the economy. By nature, durabl...