The feature chart is from the ZeroHedge article Yield Curve Inverts, Yuan Slides As China GDP Growth Slows.

Here are a couple more charts of interest.

China Macro Surprise Index

Image placeholder title

China GDP

Image placeholder title

Most countries would be thrilled with 6.8% GDP, but not China. However, many analysts don't believe those numbers and I sure don't either.

I do not know what economists would count as a recession in China, but three or even four percent growth would be a disaster vs what China expects.

If China's GDP does drop to three percent growth, it's probably below zero with real world accounting.

China aside, let's put a spotlight on potential yield curve inversion in the US.

Massive Flattening of the US Treasury Yield Curve


Image placeholder title

Inversion Synopsis

At no point is the curve inverted, but it would not take much for that to happen.

Potential Inversion Points

Image placeholder title

The yield curve is inverted any time a longer-duration security trades at a lower yield than a shorter-duration security. On the chart, everything above the blue x's is positive and everything below is negative. Nothing is inverted.

The Fed is a near lock to hike 25 basis points in December. I did not think we would get to this point but talk of a new tougher Fed chair to replace Janet Yellen in February has the market convinced.

Yet, the yellow highlights show a mere 11 to 18 basis points separates four points on the curve (the three on the right are duplicates).

If the Fed hikes 25 basis points and enough of that hike does not filter up, the yield curve will invert.

If inversion at any point sticks, a recession is likely at hand if not already in the rear view mirror.

Mike "Mish" Shedlock

Yield Curve Will Invert From the Inside Out

How does the yield curve invert? Jim Bianco at Bianco Research says "Inside Out"

What Spot in the Yield Curve is Likely to Invert First?

The yield curve has flattened considerably over the last year. Will it invert? Where? The following chart explains.

Why the Yield Curve Inverts in One Simple Picture

The yield curve inverts when the Fed keeps hiking in the face of a slowdown.

Yield Curve Inverted Out to Seven Years

Portions of the yield curve are once again inverted all the way out to 7 years.

Yield Curve is Inverted for Nearly 25 Years

Using the Fed Funds Rate as the baseline overnight duration, the yield curve is inverted for nearly 25 years.

Yield Curve Steepened Since January 3 but Portions Remain Inverted

On Jan 3, portions of the yield curve inverted with the Fed Funds rate. That's gone, but other inversions remain.

Relentless Yield Curve Flattening

Most economists expect the Fed will hike at least twice more this year. If so, portions of the yield curve may invert.

Yield Curve Inverts in 28 Places: Recession Warning Resumes

After a brief respite, the yield curve is again flashing a bright recession signal. The curve is inverted in 28 places.

Recession Without an Inverted Yield Curve? Sure, Why Not?

Japan had six consecutive recessions without an inverted yield curve. There is no reason it can't happen here.