Economic growth and stock returns have been weaker one year later

MAIN POINTS

An inverted yield curve is not a sufficient condition for a U.S. recession.

Tight financial conditions and/or weakness in the services sector would increase recession risk more meaningfully.

Inversion has been followed by inc...

Stocks and bonds gain when Fed policy becomes more accomodative.

Main Points:

• U.S. and international stock prices rise after a first Fed rate cut. Gains are strongest when there is no U.S. recession.

• Bond prices consistently rise prior to an initial rate cut, but are stagnant afterwards.

• Rate cuts can h...