Kleion says How to Avoid a Recession? Cut Interest Rates Like It’s 1995.

One of the most reliable harbingers of U.S. recession—short-term interest rates on U.S. Treasury debt higher than longer-term yields—has been flashing warning signs for months. That doesn’t mean the economy is doomed to a downturn.

So-called yield-curve inversions have preceded every U.S. downturn since the 1950s, with only one false positive in 1966. This past week, the yield on two-year Treasuries briefly surpassed the yield on 10-year notes for this first time since 2007. The most straightforward explanation is that traders...

Absurd Notion

The rest of the article is behind a paywall, but I can tell you with 100% certainly Klein's notion is absurd.

Inverted yield curves do not cause recessions. They are symptoms of a buildup of excess debt or other fundamental problems.

Those problems will not not go away if the Fed "cuts rates like 1995" or even like 2008.

If a zero percent interest rate stopped recessions, Japan would not have had a half-dozen recessions in the past decades that it did have, many without inversions.

Not even negative rates can stop recessions.

The Eurozone, especially Germany, has negative rates. Yet, it's highly likely the Eurozone is in recession now and even more likely Germany is (with the rest of the Eurozone to follow).

RECOMMENDED ARTICLES

Monetary Madness

As a prime example of global monetary madness, witness Inverted Negative Yields in Germany and Negative Rate Mortgages.

Even if the Fed made a 100 basis point cut (four quarter point cuts at once), what the heck would that do?

Stop recession for how long? Zero months? Six months? And at what expense?

What Then?

Yes, what then? Negative mortgages? A 10-year yield of -1.0% like Switzerland.

And if that doesn't work?

Hello @M_C_Klein What then?

Central banks are the source of problems, not the cure. If central banks could stop recessions, there never would be any!

Mike "Mish" Shedlock

The Fed Will Cut Rates on March 18

It's now baked in the cake. The Fed will cut rates on March 18 and most likely at least twice more.

One Heck of a Recession Party!

Stocks are on a tear. Celebrating rate cuts. With the rate cuts comes a recession. No recession? No more rate cuts.

Recession Watch: Panic Fed Rate Cuts Coming Up

Fed fund futures say a rate cut cycle has started. The Fed disagrees but will soon come to its senses.

Yield Curve and Spreads Ahead of the Fed Rate Cut Decision

Here is the final snapshot of the yield curve and spreads ahead of the first interest rate cut since 2008.

More Currency Wars: Swiss Central Bank Poised to Cut Interest Rate to -1.0%

The Swiss national bank is not happy with appreciation of the Franc. Its solution is likely another rate cut to -1.0%.

Monetary Madness Won't Stop and Bond Yields Won't Bottom with First the Rate Cut

History suggests bond yields have much further to fall.

Market Expects Emergency Rate Cut by the Fed on Monday Morning

Jim Bianco at Bianco Research makes a case for an emergency rate cut and a recession.

Nearly 50% Odds of "At Least" 3 Rate Cuts by December

In the last month the odds of interest rates cuts by the Fed have soared.

July Rate Cut Odds Still 100%

Despite today's jobs report, Implied July rate cuts odds are still 100% but a second cut is now priced out.