Two weeks ago we received a lot of panic selling in the financial markets that was caused by the Sahm’s rule recession indicator flashing a signal for a recession. The Sahm’s rule recession indicator suggests that we are already in a recession. The inverted yield curve is another important indicator to monitor, and so far the yield curve is still below zero. This situation is still tricky because the yield curve has been inverted for a very lengthy time period. Usually a recession occurs after the yield curve rises back above 0. However, historically there have been times where a lengthy yield curve inversion triggers a recession before crossing back up. So that could also be the case here because the Sahm’s rule indicator suggests we are already in a recession. Sahm’s rule has been 100% accurate in predicting every recession over the past 65 years.

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