To The Moon

One of Wall Street's favorite recession indicators looks broken.An anomaly known as an inverted yield curve, in which yields on short-term Treasurys exceed those of longer-term government debt, has long been taken as a nearly surefire signal that an economic pullback looms. In each of the previous eight U.S. downturns, that has happened before the economy sputtered. There haven't been any glaring false alarms.Now, though, that streak is threatened. The yield curve has been inverted for a record stretch -- around 400 trading sessions or more by some measures -- with no signs of a major slowdown. U.S. employers added a solid 175,000 jobs last month, and economic growth this quarter is expected to pick up from earlier in the year.Bets on cuts could reflect some chance of a recession but also some probability of a benign

One of Wall Street's favorite recession indicators looks broken.An anomaly known as an inverted yield curve, in which yields on short-term Treasurys exceed those of longer-term government debt, has long been taken as a nearly surefire signal that an economic pullback looms. In each of the previous eight U.S. downturns, that has happened before the economy sputtered. There haven't been any glaring false alarms.Now, though, that streak is threatened. The yield curve has been inverted for a record stretch -- around 400 trading sessions or more by some measures -- with no signs of a major slowdown. U.S. employers added a solid 175,000 jobs last month, and economic growth this quarter is expected to pick up from earlier in the year.Bets on cuts could reflect some chance of a recession but also some probability of a benign