I recently meet with a client and we were discussing the economy. She indicated that we are entering a period of a negative yield curve (or “inverted yield curve”) on interest rates.
To better explain this, I found this definition on Investopedia.com: an inverted yield curve is an interest rate environment in which long-term debt instruments have a lower yield than short-term debt instruments of the same credit quality. This type of yield curve is the rarest of the three main curve types and is considered to be a predictor of economic recession.
According to my client the Fed is aware of this and seemingly has no plans to deal with the situation at the moment. So we may be entering a period of recession soon.
Granted the articles are no as readily available as they were last year, but I can still believe that in our area there are a number of businesses that are close to the edge of defaulting on their property mortgages or taxes. The economy is not a vibrant as the administrations would have us believe.
So if the businesses start to slide off the cliff, were does that leave the employees? Where does this leave your business?
Is your business in a position and prepared for an economic hiccup of an unknown magnitude?