To be inverted…or not to be inverted. That is the question. Now what?

And, just like that, the bond market yield spread inversion that everyone was worrying about in mid-August has returned to a positive—if slight—slope, about two basis points, with the tens at 1.56% and the twos at 1.54%. In other words, the inversion inverted and all’s well. There, feel better now?

I’m being facetious, but there are times when I think it’s our job to point out that taking a step back from the screaming headlines is about the best first move in any investment approach. Moreover, as noted in these pages, was the fact that the negative yield spread seen briefly between the U.S. Treasury ten-year and the two-year notes has not been an effective recessionary signal.

Nor does the very latest U.S. data signal such. For example, according to the latest issue of the Fed’s Beige Book report, most U.S. businesses remain optimistic about their prospects despite concerns about tariffs and trade policy, as the economy continues to grow. Economic activity and employment appeared to grow at a modest pace in August and late July. Wages rose at a “modest to moderate” pace from the earlier part of the summer, and price increases were also modest.

And then Friday’s jobs data delive...

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