Bank Troubles and Cooling Economy Signal Possible Recession

Plummeting bond yields, steep drops in oil and stock prices, and a sharp jump in volatility are all signaling that investors fear a recession is now on the near horizon. The rapid moves in markets after the regional bank failures in the U.S. has some strategists now expecting a contraction in the economy to come sooner. Economists are also ratcheting down their growth forecasts on the assumption there will be a pullback in bank lending. The Federal Reserve has been trying to slow down the economy and the strong labor market in order to fight inflation.