The Most Significant Recession Indicators

A recession is a period of economic decline that can hurt the livelihood of millions and by having many recessions throughout history, indicators were found to predict when recessions would occur.

The most significant indicators of a recession are:

1. Negative spread between 10 year T-bonds and 3 month T-bonds
2. Sharp drop in the housing market
3. Rising debt (consumer, automobile, student)

I will only discuss the first one.

https://www.treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=yield

This is a daily chart of the treasury yield curve rates. The first highlighted box going from left to right are the 3 month interest rates and the second highlighted box are the 10 year interest rates. 

A negative spread between 10 year T-bonds and 3 month T-bonds means that if the 3 month rates are greater than the 10 year rates, it creates a negative spread and could trigger an economic downturn.