Yes recession risk increases...A tell tale sign is the inverting of the yield curve..
Back in March there was a trending move towards an inverted yield curve. With the RBNZ interest rate cut that trending move was eliminated.....Now this trending is back..with the 5y Swap very close to causing a partial inverted yield curve event.
The option to eliminate the inversion threat is drop the short term rate again and again in an effort to keep it lower than the falling long term rates.
Todays table shows a big drop....
NZ OCR 3.25 10y Swap 3.87 -0.06 -1.53%
3m Bank Bill 3.18 -0.04
-1.24% 5y Swap 3.30 -0.06
-1.79%
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