The chart that predicts recessions

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A chart called the "yield curve" has predicted every US recession over the last 50 years. Now it might be predicting another one.

Economic experts are starting to warn that a US recession is becoming more likely because of something called the "yield curve." So what's the yield curve? What does it show? And why is it bad if it "inverts?" We visualized the yield curve over the past four decades, to show why it's so good at predicting recessions, and what it actually means when the curve changes.

Read more about the yield curve:

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I'd just like to say that whoever did the sound design for your animation deserves a raise. It's so subtle but so good.

markog

so this yield curve DOES predict the collapse lol

dignochristopher

Thanks to the recession I'm back on my feet again.

The bank took my car.

crylite

This video predicted the future. Although, perhaps not in the way we would have expected....

carykh

The problem is that recessions tend to self-realize.

Some people believing a recession is coming will make more and more people believe as well, leading to a recession.

Michele-nzoz

In short: a recession happens because investors are afraid of a recession happening...

mariodidier

Watched this video in September 19, showed it to my mates and everyone ignore it. 6 months down the line, coronavirus is declared a global pandemic and we have another recession. I’m just saying....!!!

madridista-cr

Last time I was this early Lehman Brothers was still operating

frbo

But... Why do recessions always happen around the turn of a decade?

dundee

Do you know when americans know when they are out of a recession?

When they enter a new one.

alexandrub

Such clear cut video depicting inverted yield curve and recession! Keep up the great work Vox~

TOEICCoach

So an estimated recession in 14-20.8 months? October 2020 to April 2021.
This predicts an average of 14 months of inversion before the recession starts. So the earliest could be October 2020. If you count the start of inversions to a recession its 20.8 months. So the latest the recession could start is April 2021.

1980 recession had 17 months of inversions and 0 months in between,
1982 recession had 11 months of inversions and 0 months in between,
1990 recession had 12 months of inversions and 19 months in between, 7 non-inversions months
2001 recession had 14 months of inversions and 32 months in between, 18 non-inversions months
2008 recession had 16 months of inversions and 25 months in between, 9 non-inversions months

tipperzack