Janet and Jerome's Mixed Messages Spook Markets, Guarantee Recession

Fed Chairman Jerome Powell's preferred bond-market indicator, the spread between the yield on three-month Treasury bills and their expected yield in 18 months, is signaling a recession is certain this year and that rate cuts are also coming. An inverted yield curve suggests investors aren't confident about future returns, and it's a classic warning for an economic downturn. The Fed made a quarter-point interest rate hike on Wednesday, but Powell said interest rates will still remain elevated through the year. However, recent bank turmoil could help the Fed achieve its goals by tightening credit conditions overall.