Event Date of inversion start Date of the recession start Time from inversion to recession Start Duration of inversion Time from recession start to NBER announcement Time from disinversion to recession end Duration of recession Time from recession end to NBER announcement Max inversion Months Months Months Months Months Months Basis points1970 recession December 1968 January 1970 13 15 NA 8 11 NA −521974 recession June 1973 December 1973 6 18 NA 3 16 NA −1591980 recession November 1978 February 1980 15 18 4 2 6 12 −3281981–1982 recession October 1980 August 1981 10 12 5 13 16 8 −3511990 recession June 1989 August 1990 14 7 8 14 8 21 −162001 recession July 2000 April 2001 9 7 7 9 8 20 −702008–2009 recession August 2006 January 2008 17 10 11 24 18 15 −512020–2020 recession March 2020 April 2020 Average since 1969 12 12 7 10 12 15 −147Standard deviation since 1969 3.83 4.72 2.74 7.50 4.78 5.45 138.96 Estrella and others have postulated that the yield curve affects the business cycle via the balance sheet of banks (or bank-like financial institutions).Arturo Estrella, FRB of New York Staff Report No. 421 , 2010 When the yield curve is inverted banks are often caught paying more on short-term deposits (or other forms of short-term wholesale funding) than they are making on long-term loans leading to a loss of profitability and reluctance to lend resulting in a credit crunch. When the yield curve is upward sloping, banks can profitably take-in short term deposits and make long-term loans so they are eager to supply credit to borrowers. This eventually leads to a credit bubble.
Event Date of inversion start Date of the recession start Time from inversion to recession Start Duration of inversion Time from recession start to NBER announcement Time from disinversion to recession end Duration of recession Time from recession end to NBER announcement Max inversion Months Months Months Months Months Months Basis points1970 recession December 1968 January 1970 13 15 NA 8 11 NA −521974 recession June 1973 December 1973 6 18 NA 3 16 NA −1591980 recession November 1978 February 1980 15 18 4 2 6 12 −3281981–1982 recession October 1980 August 1981 10 12 5 13 16 8 −3511990 recession June 1989 August 1990 14 7 8 14 8 21 −162001 recession July 2000 April 2001 9 7 7 9 8 20 −702008–2009 recession August 2006 January 2008 17 10 11 24 18 15 −512020–2020 recession March 2020 April 2020 Average since 1969 12 12 7 10 12 15 −147Standard deviation since 1969 3.83 4.72 274 7.50 4.78 5.45 138.96 Estrella and others have postulated that the yield curve affects the business cycle via the balance sheet of banks (or bank-like financial institutions).Arturo Estrella, FRB of New York Staff Report No. 421 , 2010 When the yield curve is inverted banks are often caught paying more on short-term deposits (or other forms of short-term wholesale funding) than they are making on long-term loans leading to a loss of profita.bility and reluctance to lend resulting in a credit crunch. When the yield curve is upward sloping, banks can profitably take-in short term deposits and make long-term loans so they are eager to supply credit to borrowers. This eventually leads to a credit bubble.