How central banks have 'compromised' the yield curve's predictive power

In recent weeks, investors have fixated on the inversion of several sovereign yield curves, most notably the US Treasury curve.

Historically, an inverted curve - where shorter maturity bonds have higher yields than longer maturity bonds - has been a reliable harbinger of an oncoming recession.  What does the yield curve inversion really mean for investors? Given current valuations, a sharp slowdown or global recession would spell significant losses for risk assets such as equities, commodities, or below-investment-grade bonds. The bear case for an inverted curve is pretty straightforward. As a macro indicator, the yield curve has an exceptional, but not perfect, record of forecasting recession in the US. Th...