Announcer:
For Your Money is brought to you by NelsonCorp Wealth Management.
Brandy Auterson-Hurst:
It’s now time for For Your Money. We’re joined by David Nelson, CEO of NelsonCorp Wealth Management. Welcome back, David.
David Nelson:
Thank you. Thanks for the invite.
Brandy Auterson-Hurst:
So we keep hearing talk about interest rate cuts by the Fed this year, but there hasn’t been as much talk about a recession. Is that something that concerns you?
David Nelson:
Very much so. There’s been a lot of talk about interest rate. It’s the hot topic as far as over the last 12 months, give or take. Wall Street had predicted, give or take, most analysts were thinking five to six cuts would take place in 2024. We haven’t seen any yet. All likelihood, maybe one towards the end of the year, maybe even none. Most of them are being pushed back to ’25.
Now, my chart today gives folks a good look as far as at a really important variable pertaining to a recession, so that is looking at the yield curve. And we’re looking at the 10-year Treasury versus a two-year. And they’re inverted, and it’s the longest that we’ve seen in inversion, going back to 2022. And this is one of the precursors oftentimes to a recession. That’s why it’s so important as far as that people pay attention as far as to this item rate here, as far as, again, the 10-year versus the two-year.
Brandy Auterson-Hurst:
So how can viewers use this information when they’re making investment decisions?
David Nelson:
Well, I think the big thing for most individuals is that this could continue, this inversion, for a period of time, or it could revert back with no recession. That is possible, but it’s rare. It’s very rare. Generally speaking, when you have an inversion, you’re going to walk into, at some point in time, a recession. And a recession, as I think most people are aware, is not something that we want to see as far as from the market’s perspective, as well as just the economy.
Brandy Auterson-Hurst:
All right, David, as always, thanks for your insight today.
David Nelson:
Thank you.
Brandy Auterson-Hurst:
If you missed any of our discussion, we’ll make it available for you on ourquadcities.com.
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