We Are Getting Very Close To An Inverted Yield Curve – And If That Happens A Recession Is Essentially Guaranteed

We Are Getting Very Close To An Inverted Yield Curve – And If That Happens A Recession Is Essentially Guaranteed:
"So why is an inverted yield curve

such a big event?  
Here is how CNBC
recently explained it…

An inverted yield curve, which has correctly predicted the last seven recessions going back to the late 1960’s, occurs when short-term interest rates yield more than longer-term rates. 
Why is an inverted yield curve so crucial in determining the direction of markets and the economy? 

...What is truly alarming is that the Federal Reserve can see what is happening to the yield curve, and they can see all of the other  indications that the economy is slowing down, but they decided to raise rates anyway.

Raising rates in a slowing economy is a recipe for disaster, but the Fed has gone beyond that and has declared that it intends to start unwinding the 4.5 trillion dollars of assets that have accumulated on the Fed’s balance sheet.

Janet Yellen is trying to tell us that this will be a smooth process, but many analysts are far from convinced.  
For instance, just consider what Peter Boockvar recently told CNBC…

...I hope that there are no political motivations behind the Fed’s moves.  

During the Obama era, interest rates were pushed all the way to the floor and the financial system was flooded with new money by the Fed.  
But now the Fed is completely reversing the process now that Donald Trump is in office.

When the inevitablestock market crash comes, Trump will get most of the blame, but it will actually be the FederalReserve’s fault.  
If the Fed had not injected trillions of dollars into the system, stocks would not have ever gotten this high.  
And now that they are reversing the process that created the bubble, a whole lot of innocent people out there are going to get really hurt as stock prices come crashing down.

And if you thought that the last recession was bad for average American families, wait until you see what happens this time around.  
As Kevin Muir has noted, it is utter madness for the Fed to hit the breaks in a rapidly slowing economy…