Markets, policy and the economy, explained.
Goods prices have cooled, but services inflation tends to move with wages and is slower to respond to interest-rate changes. That is why policymakers keep pointing to it when they explain holding rates steady.
When short-term yields sit above long-term ones, markets are pricing in lower rates ahead. It has preceded most recent recessions, though the lag between inversion and downturn has varied widely.
© Economician