A Fed chairman is never going to say, "Yup, there's a recession coming": the incentives of their position don't permit it. So they will always come up with reasons why a signal with a previous 100% success rate doesn't mean much now, but in the end, it always amounts to "This time is different", aka, the four most expensive words in history.
Looking at the table, it's odd that only "inversions" are counted as predictions, and there seem to be far more cases where it got "close" to zero, but not quite there.
Without a good explanation on why that exact point is so critical, I am a bit skeptical that this is anything but noise.
If there is a good explanation of why it is critical, then we're not really in worrying territory yet either then, because we're not there yet, and we're in the zone of lots more false positives.
Correct. This is the only rational explanation for the inversion. There is nothing else to imagine about the negative (inversion). Whether the number is "gamed" or just a single statistic makes zero difference to what the market is actually saying about debt instruments: "we care about now than the future".
What is afoot, as you say, is clearly a lack of confidence in longer term markets resulting in a move towards keeping asset in cash. Or those strange commodities like gold.
I personally believe global markets are in for a rough ride very soon. Brexit is not going to help much either. DT is going to have no time for Twitter.
