The countdown to a recession has officially begun after 'more accurate' yield curve indicator turns negative

After the 3-month and 10-year US Treasury yield curve inverted, the clock began to tick for an economic recession in the US.

When the shorter-term yield of a US Treasury note is higher than the longer-term yield, there is an inverted curve. Long-term bonds have higher yields than short term bonds. When the economy is uncertain, investors demand a premium for shorter-dated bonds.

The 2-year and 10-year curve are closely watched because they are seen as a signal that an economic recession is on the way.

The 3-month and 10-year curve has historically been better at predicting recessions. The 3-month yield crossed above the 10-year yield on October 25 and has held steady with an ongoing spread of nearly 10 basis points.

The 3-month Treasury yield was four basis points higher than the 10-year Treasury yield.

A recession is likely to hit the economy in the next year or two, according to a new report.

It takes an average of 12 months for a recession to start. It took as long as 22 months or as little as 5 months.

The Fed is expected to raise interest rates by more than 400 basis points this year in order to tame inflation. The only way to tame inflation is through a recession.

The outlook for growth is going to get worse as the Fed hikes. Koning said that it reflected optimism that the Fed will do enough to bring inflation down but also that tightening will mean growth will have to be cut. The Fed cuts after their last hike.