Consumer Confidence and the Yield Curve Recession Indicator

Tyler and Jordan discuss the recent Fed meeting which resulted in the first interest rate hike since 2018. Fed economists also lowered their projections for economic growth in the US from the 4% projected in January to just under 3%. Economist are warning of slower growth likely due to continued geopolitical concerns and inflation. Tyler discusses the current divergence between consumer confidence levels and consumer spending via retail sales. The US economy is roughly 70% tied to consumer spending so if the poor consumer confidence figures spill over into lower consumer spending the odds of a recession will rise. One historically accurate predictor of a recession is a yield curve inversion. Jordan discusses what to look for and how far away we could be from a yield curve inversion and a potential recession.

Charts discussed:

University of Michigan Consumer Sentiment Index (higher is more confident)

US Retail Sales

Yield curve inversions and recessions


Recent Posts

See All

Tyler and Jordan review the Commerce Department’s estimate of first quarter Gross Domestic Product (GDP) which showed the US economy contracted on a real (after inflation) basis. On a current dollar b

Tyler and Jordan sit down to recap the first quarter 2022 capital market returns. The S&P 500 fell nearly 5% in the quarter with weaker returns in small cap stocks (-7.8%), small cap growth stocks (-1