This video by Gary Shilling shares that recessions are caused by either the Fed raising rates or financial shocks. While Mr. Shilling doesn't see any major financial shocks, except perhaps emerging market dollar denominated debt, he does think the Fed raising rates is a good possibility.
The inversion for the yields of the 3 and 5 year treasuries my be the first indication of a Fed induced recession. The good news is that a recession usually doesn't happen for about 24 months after this inversion. So there is still time to reduce exposure to the stock market.
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This is not financial or investment advice. Please consult a professional advisor.
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