Can you link me to something on that? I'm genuinely curious.
The research I've seen all stems from the original paper, published in the late 90s. (And it took two recessions for it to be taken seriously as a recession indicator.)
The yield curve is built into all assets - that's how you discount future stock earnings to derive present value. An inversion roughly means that the curve was wrong, i.e. the market was overly optimistic about how low the interest rates are going to be.
> Campbell R. Harvey's 1986 dissertation[4] showed that an inverted yield curve accurately forecasts U.S. recessions.
The research I've seen all stems from the original paper, published in the late 90s. (And it took two recessions for it to be taken seriously as a recession indicator.)