The U.S. economy is now in its 11th year of uninterrupted expansion, its longest period on record without a recession. As a result, it's not surprising that some economists and financial experts predict one may be looming. But there are sound economic reasons to believe the expansion will continue and that a recession, while always a possibility, nonetheless remains unlikely in the year ahead.
Pessimists tend to make several arguments for an imminent recession. One relates to what's known as the yield curve. When mid- to long-term interest rates fall below short-term rates, as has happened several times in 2019, this tends to be a sign that investors are nervous and less confident than usual to lock themselves in to longer-term investments. A “yield curve inversion” like this tends to happen before recessions. Still, the yield curve is an imprecise predictor and can invert even when no recession is coming. More recently, the Treasury yield curve has returned to normal, suggesting the time of instability may have passed.
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