Business Cycle Effects

Question 1

Initial Recovery

Answer 1

Yield Curve is steep, Business Confidence/Investment rising, Consumer Confidence is Low, Risk Assets Outperform, Inflation is not Present, Gov’t Yields Bottoming

Question 2

Early Upswing

Answer 2

Yield Curve, front steepening, back half flattening, Business Confidence/Investment Rises, Consumer Confidence Rises, Risk Asset Prices are Rising, Unemlployment Falls, Inflation is not present,

Question 3

Late Upswing

Answer 3

Yield Curve, Flattening from Inwards-Out (SR Rising), Risk Assets rise volatility, Unemployment Low, Inflation Looming, Monetary Policy Shift

Question 4

Slowdown

Answer 4

Yield Curve is flat to inverted, Business Confidence/Investment is dropping. Risk Assets falling, Inflation is Strong

Question 5

Recession

Answer 5

Yield Curve is Steepening, Business Confidence/Investment Drops, Consumer Confidence Falls, Risk Assets Bottom