Is the Yield Curve a Good Prediction for a Recession?

Bond markets are one way that investors speculate or put their money where their mouth is through these yields. In terms of the real economy, though, we believe it's really through the banking system, right? Particularly hard to earn a spread when the yield curve is inverted. So they're going to be less likely to extend credit. And historically, that slows economic growth and ultimately leads to recession.