Indicators warn America could face a recession in the next year or two, Federal Reserve Bank of Minneapolis President Neel Kashkari says, and the country is not as prepared to weather a downturn as it should be. Speaking Wednesday to the Minnesota chapter of the National Association of Corporate Directors, Kashkari said there are multiple warning indicators suggesting a recession is on the horizon. He pointed in particular to the so-called inverted yield curve, in which bond markets offer better rates for two-year Treasury bonds than 10-year notes. That signal, which occurred briefly in August, shows bond traders looking for safer long-term holdings and has been a reliable predictor of a recession, Kashkari said. “Now, every time this happens in the last few cycles, there are some economists who come up and say, ‘Yeah, yeah, we’ve looked at it, this time is different.’ Those are the most dangerous words in economics,” Kashkari said. “I don’t believe this time is different. I’m certainly not willing to bet the U.S. economy on this time is different.” Kashkari, who worked on the 2008 bank bailout as an official in the Bush administration Treasury Department, said the financial system is better positioned to weather… Read full this story
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