I’m always monitoring economic data for clues about where the broader market and sentiment might be headed. Since I’m a visual thinker, I like to create charts—like my egg price and median house price charts. In this post, I’ll share my Python code for generating a chart that overlays the 2-year/10-year Treasury yield spread with the current jobless rate, highlighting recession periods for context.
I track this chart closely because the 2-year/10-year spread has historically predicted recessions whenever it turns negative. However, the timing of a recession remains uncertain. This is where jobless rates become a crucial indicator—when employers start shedding jobs, the likelihood of a recession increases.
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