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The 1619 Project and the Inverted Yield Curve. William Michael Cunningham, Creative Investment Research

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An inverted yield curve reflects a situation in which interest rates on long term bonds are lower than those on short term bonds (bills). Supposedly, this is one of the surest signs that a recession is looming, since, normally, interest rates are higher on long term bonds than they are on short term bonds.

The standard explanation for the normal yield curve relies on something called "liquidity preference", which states that "an investor demands a higher interest rate or premium on securities with long-term maturities that carry greater risk because, all other factors being equal, investors prefer cash or other highly liquid holdings."

On Sunday, August 18th, the New York Times published the print edition of the 1619 Project. The Project documents the 400th anniversary of the arrival of the first forced labor brought from Africa to the then-Virginia colony. The paper notes that "in colonial times, when land was not worth much and banks didn’t exist, most lend…

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