Monitoring the US yield curve for recession signs. While valuations are reasonable following the Q1/2018 correction, we continue to monitor the yield curve and specifically the 10-year versus 2-year US Treasury Yield Spread (see below). The shaded areas on the chart below represent US recessions. When the yield spread dips below 0% and short-term interest rates move higher than long-term rates (commonly known as an inverted yield curve), it is an excellent predictor of a bear market and US recession. We are not there yet and will continue to monitor this important leading indicator of economic activity.