The yield curve inversion was not a reliable signal of recession in the modern financial system because maturity transformation has changed: via swaps and derivatives, a bank can borrow and lend at the same maturity (e.g., both at the 10-year point), eliminating classic interest-rate-risk from inverted curves.

factualpending

Speaker

Mark Da

Evidence Quote

you can borrow at the point you lend so you can borrow the 10e point...use swaps to transform the maturity

Source

The Crisis In Monetary Policy: It Doesn't Matter That Much | Mark DowForward Guidance
Created: 8/11/2026, 1:22:08 AM

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