Three Signals of Recession : A Comprehensive Analysis of the U.S. Interest Rates

This study examines the predictive power of the Delta Yield Curve in anticipating recessions in the U.S. economy, focusing on the difference between "US treasury securities at 10-year constant maturity" and "market rate on 3-month treasury bills" from 1962 to 2023. It identify three sequential signals: inversion, confidence level, and Delta0, which have consistently foreshadowed economic downturns, reflecting the changing expectations of investors and the rate of consumption. These signals offer valuable insights for policymakers and economic agents seeking to monitor yield curve dynamics and address potential economic downturns. My findings contribute to the existing literature on recession prediction and the role of yield curves