The Term Spread as a Predictor of Financial Instability
![](https://libertystreeteconomics.newyorkfed.org/wp-content/uploads/sites/2/2021/11/LSE_term-spreads_schularick-920_x_576.jpg?w=920)
The term spread is the difference between interest rates on short- and long-dated government securities. It is often referred to as a predictor of the business cycle. In particular, inversions of the yield curve—a negative term spread—are considered an early warning sign. Such inversions typically receive a lot of attention in policy debates when they […]
Reading the Tea Leaves of the U.S. Business Cycle—Part Two
![](https://libertystreeteconomics.newyorkfed.org/wp-content/uploads/sites/2/2020/02/6a01348793456c970c0240a4e61530200d-500wi.jpg?w=500)
New work by Richard Crump, Domenico Giannone, and David Lucca finds labor market data to be the most reliable information for dating the U.S. business cycle.