The Unpredictability of Recessions

Predicting recessions based on economic indicators like yield curve inversion is challenging as historical data shows that the onset of a recession can take a considerable amount of time to materialize. For instance, during the 2008 recession, the S&P index surged even after the yield curve inverted, with the recession hitting much later. Real-world projects and economic effects often have a delay in reflecting changing economic conditions, such as interest rate increases, showing that the impact of such changes may not be immediate.