Janet Yellen: The bond market doesn't necessarily gives us a recession signal

Former Fed Chairman Janet Yellen said at the Credit Suisse Asian Financial Conference in Hong Kong that the latest bond market signal does not necessarily signal a downturn in the economy and a recession. In her opinion, the expectations for an impending financial crisis are exaggerated. Her expectations are rather connected to the FED thatemi  are more likely to reduce interest rates in the United States.

After the fall in markets on Friday, which was caused by the reversal of the yield curve in negative territory, investors seemed to have cooled the lusts, and today we see a fragile recovery in the stock markets. It is obvious to investors that the new monetary policy of tightening by the Fed damages the banking sector and rather its ability to lend, which in turn reduces entrepreneurs' opportunities to start a new business that will bring the necessary growth of the economy .

“In contrast to times past, there’s a tendency now for the yield curve to be very flat,” she said, adding that it’s now easier for it to invert — which traditionally meant investors had become concerned about a future downturn.

“And in fact it might signal that the Fed would at some point need to cut rates, but it certainly doesn’t signal that this is a set of developments that would necessarily cause a recession,” Yellen added.

Jannet Yellen also confirms that the US economy is slowing, but a recession remains unlikely.

Read more:

• And for all the bounty hunters: Iran offers $80m for the head of Donald Trump
• US service member and 2 US Defense Dept contractors killed in Kenya attack
• Iranian Quds leader Qasem Soleimani has been killed – how are markets reacting
• A calm end of an otherwise loud 2019
• Old but Gold – Top 5 posts of Varchev Finance