US sees first recession warning in a decade

Wall Street issued a warning on Wednesday that a US recession may occur in the next year.

The warning came from the bond market as investors began demanding more interest on two-year Treasury debts than 10-year debt for the first time since 2007.

This has caused an ‘inversion’ in the yield curve in that sector of the bond market – one which has correctly predicted every recession since the 1950s.

ING economists wrote: ‘On the economics dashboard of doom, we have another flashing warning light,’ according to Politico.

‘Overnight we have seen the inversion of the 2-10 year part of the Treasury yield curve, the first time this has happened since 2007 when the global financial crisis started to bite.

A looming recession may hinder Donald Trump’s chances at a second presidential term and cause the 2020 election to look more like the 2008 election, which occured directly in the middle of the last recession that began in December 2007 and lasted until June 2009.

That year, devastated economy dominated presidential debates between Barack Obama and John McCain.

The news caused investors to panic and dump their stocks, wiping out gains that followed Trump’s announcement that he plans to delay tariffs on China until December 15

Trumps explained his decision, claiming that he did not want higher prices during the Christmas shopping season – which appears to ruin his argument that China would be paying for the taxes, not Americans.

The recession warnings cited numerous factors for the economic drop.

Most notably, economists cited uncertainty over trade as the biggest drag on the market, which is seen in businesses that are spending less.

Fear of a recession could also help incite a recession as individuals and businesses become afraid of making big investment

The Trump administration has denied the possibility of a recession as a White House official said: ‘There is no recession coming.’

‘The consumer is way too strong as are jobs and wages. I just don’t by it.’