What's going on?

There was another �yield curve inversion� on Wednesday, but this one happened in both the US and UK � and to particular government bonds. This could signal the beginning of the end� of current economic growth (tweet this).

What does this mean?

Yields of long-term government bonds are typically higher than those of short-term bonds, partly to reflect the greater risk of an investor not getting repaid. But investors feeling antsy about the immediate economic future will instead favor longer-term bonds, pushing their prices higher and yields lower (the two always move in opposite directions).

Investors seemed shaken by Wednesday�s raft of disappointing economic data (more in the next story ?), so demand for ten-year British and American government bonds rose. That led to their yields sinking below those of two-year bonds � in what�s known as a yield curve inversion. Inversions aren�t new, but a �two-ten inversion� has preceded every recession in the last 60 years.

Why should I care?

For markets: Investors ditch stocks.
Apparently unconvinced by Tuesday�s tariff announcement, investors sold off shares on Wednesday � though the price swings might�ve been more noticeable because August vacays typically keep buyers and sellers busy. Instead, investors� bond-buying (of new and existing ones) pushed even 30-year bond yields to record lows. Coworking space giant WeWork might rue its timing: it�s just confirmed plans to join the stock market, but share-hungry investors may now be harder to come by.

For you personally: There�s good news and bad news.
The good news is you probably needn�t worry � not yet, at least. History suggests a US recession usually happens two years after a two-ten inversion, though enough investors selling simultaneously might cause a �bear market�. The bad news is that products are getting more expensive: according to Wednesday�s data, July�s higher-than-forecast US price rises were followed by a UK hike. No one thought to tell Macy�s � the department store chain missed profit expectations after relying on discounts to make sales.