The yield curve, which plots bond yields across various maturities, has reached its most inverted level in over 12 years amid rising trade tensions between the United States and the rest of the world. As expected, this sparked renewed recession chatter on many mainstream media platforms. It is easy to see why — every U.S. recession over the past 60 years has been preceded by an inversion of the yield curve.

This isn’t the first time we have seen aggressive media coverage on the topic. Back in mid-2018, American media sources started writing about the yield curve as it started flattening. At the same time, The Fifth Person editor-in-chief Adam Wong wrote a fantastic primer about yield curves that can be found here.

It is this renewed interest in the yield curve that set me thinking about the seemingly airtight relationship between yield curve inversions and recessions.

Why does