Bond markets predict recession

Fisher Funds’ David McLeish said rate hikes may misfire. (Image: Fisher Funds)

Tue, 06 Dec 2022

There’s a famous saying that the share market has predicted nine of the past five recessions, a joke attributed to Nobel-prize-winning US economist Paul Samuelson.However, bond markets tend to be much better predictors and yield curves around the world have been distinctly negative, where shorter-dated securities yield more than longer-dated ones, for some time now.In New Zealand, the two-year swap rate ended at 5% on Friday and the 10-year government bond yield was 76 basis points lower at 4.24% – those rates have fallen sharply re...

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