Inverted Yield Curves Open Door to Alternative Opportunities – Financial Services

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Given recent rate movements, there have been discussions about whether old economic metrics and indicators are still effective in the current market environment.

It goes without saying that behind all these indicators lie investor sentiment and market cycles, which are cyclical in nature. There are other indicators such as the global PMI (below 50), LEI (leading economic indicator compiled by the Conference Board), US consumer sentiment, etc., but the traditional correlation that two quarters of contraction in the GDP equates to a recession continues to prove true.

In this market, it is difficult to forecast and predict given the uncertainty across the world and one of the main contributing factors to our current position comes from geopolitics, which leads to supply-driven inflation rather than by request.

Regardless of the indicators or signals, we all recognize that rates are on an uptrend whether they are reversed or not. Bond yields are rising, the financing and investment environment is getting tougher.

Perhaps we should all keep an open mind to accept the fact that alternative funding and investment channels are the new “norm”. Whether it’s digital assets or private credit opportunities, we need to prepare and keep up to date with the latest market trends so that we don’t miss out on anything in the near future.

The opinions expressed herein are those of the authors and not necessarily those of FTI Consulting, Inc., its management, subsidiaries, affiliates, or other professionals.

The content of this article is intended to provide a general guide on the subject. Specialist advice should be sought regarding your particular situation.

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