August 14, 2019

NEW YORK — Wall Street hoisted another hurricane warning on the economy on Wednesday as fear continues to rise that a recession could arrive by next year, potentially crashing into President Donald Trump’s attempt to win a second term.

This time, the warning came from the bond market where investors began to demand more interest on two-year Treasury debt than 10-year debt, an “inversion” of a measure known as the yield curve that last happened in 2007 before the financial crisis. The fresh scare helped drive the Dow Jones Industrial Average down 800 points, or three percent, and spurred Trump to cast blame on the U.S. Federal Reserve in a series of afternoon tweets.

It sounds like a wonky bit of financial arcana. But it’s a closely watched gauge. And it has investors freaked out.

Read more:

https://www.politico.com/story/2019/08/14/donald-trump-wall-street-recession-risk-1661317