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What Happened to the Recession?

What Happened to the Recession?

March 14, 2024

Sir John Templeton once said, "The four most expensive words in investing are: ‘This time it’s different."1 And usually, I would agree.

But the phrase, "This time it’s different," may apply to the 2024 economic outlook. For nearly two years, signs have pointed to a recession, yet the economy continues to hum along. In fact, one multinational bank officially announced that it no longer expects the U.S. economy to move into a recession this year.2

The accompanying chart shows that an inverted yield curve is created when long-term Treasury yields fall below shorter-term returns. This phenomenon has signaled every recession since 1976. Except this time (apologies, Sir Templeton), it's different. Despite an inverted yield curve that began in July 2022, there's no recession in sight.

The question is, why?

The answer may lie in another one of my favorite bits of wisdom: "Don’t worry about the horse; load the wagon." In other words, don’t let things you can’t change impact what you can change. That's one of the many reasons we crafted your portfolio strategy to anticipate market volatility while accounting for your goals, time horizon, and risk tolerance.

As always, if you have any questions about the above, please don't hesitate to ask. Otherwise, we'll continue to monitor markets and the economy with your goals firmly in mind.

David S. Dixon, CFP®

Jacob S. Bierstedt, CFP®, ChFC

#DixonFinancialGroupLV #Recession #TreasuryYield #YieldCurve #PortfolioStrategy

1., 2024. "Templeton Maxims"
2., February 6, 2024. “Deutsche Bank no longer expects U.S. recession in 2024.”