Bond Market & Recession Indicators

Bond markets can act like a sonometer to detect financial crises before they occur. However, the sonometer cannot detect the underlying cause of recessions, so it is important to be prepared for the next one.

DXY Chart

The DXY chart measures the dollar's value against other currencies. In March, it went down due to hawkish rhetoric from the Fed but has since recovered.

One Month Treasury

The one-month treasury trades at around 40 basis points below the Fed's desired floor for overnight rates. This suggests that the market does not believe the bailouts will be effective.