Avoiding Economic Slowdown

A few months ago, Larry Summer, the former secretary of the United States treasury, called this year as “the most dangerous moment since the 2008 Financial Crisis”.

Bloomberg Economics in October a model to determine the likelihood of a financial crisis in the next 12 months. According to its December calculations, the chance of the US heading into a recession in the next 12 months is 29 percent, up slightly from 27 percent in November.

Despite the increased risk of recession, the signs of negative returns that have haunted US financial markets have begun to subside. In fact, the latest developments indicate a positive trend, meaning that the yield on short-term debt securities is lower than long-term yields.