YIELDS’ MARCH MADNESSEconomic Commentary |
Investors are becoming increasingly impatient, even as the Federal Reserve (Fed) doubled down on patience at its March meeting.
Policymakers signaled a complete pause in policy in a nod to slowing growth and global uncertainty, while Fed Chair Jerome Powell’s praise of domestic economic fundamentals rang hollow for financial markets. Recession concerns intensified as the 10-year Treasury yield dropped through the end of the week, briefly falling below the 3-month yield on March 22 for the first time since 2007. Yield curve inversion (or long-term rates falling below short-term rates) can be an ominous signal for the economy, as it’s preceded each of the nine recessions going back to 1955. However, we encourage investors to understand the catalysts before bracing for an economic downturn.
John Lynch Chief Investment Strategist, LPL Financial
Barry Gilbert, PhD, CFA Asset Allocation Strategist, LPL Financial
Callie Cox, Senior Analyst, LPL Financial