eResearch now has Canada on official count-down to a possible Economic Recession. Historically, a recession begins 15-20 months after an Inversion has occurred. Our methodology for forecasting a recession determined that the count-down for Canada began on August 8 when the 10-year/2-year yield curve ratio had an inverted reading for ten consecutive business days.
In the United States, mass hysteria ensued last Tuesday when the 10-year yield, intra-day, inverted with the 2-year yield, although it did not end up being inverted at the close of business that day. So, in our opinion, there was no Inversion with that metric in the USA. We use a more complicated methodology for determining an Economic Recession in the USA versus Canada. We justify this different approach by realizing that the U.S. experience is much larger than Canada’s and, also, that what happens in Canada economically is largely dependent upon what occurs in the United States.
You can access this week’s Recession Barometer report here: … RB_081619
