This is a graph that has predicted every recession since 1976.
這是一張自1976年以來預測了每一次經濟衰退的圖表。
00:04
What you'll notice is that the recession comes most often when this curve comes out of the inversion. And right now, that's exactly where we sit. The question that comes is, are we now due for a big recession this year? In this video, we're going to look at the timing
of the inversion, why this curve signals a recession, and if one will actually come in 2026.
為何這條曲線預示著經濟衰退，以及經濟衰退是否真的會在2026年到來。
00:25
The first thing that you need to know is that not every inversion leads to an immediate recession.
您需要知道的第一件事是，並非每一次倒掛都會立即導致經濟衰退。
00:31
The timing can vary. The general lead time between the start of the inversion and the recession is 6 to 23 months. Looking at the inversion that started in January 1980, did the yield curve invert before the recession? Yes it did, it inverted in August 1978, which means the lead time was
17 months. The recession that started not long after July 1981 was also preceded by an inversion.
17個月。1981年7月後不久開始的經濟衰退，也曾出現倒掛。
00:56
This occurred in September 1980, that gives it a lead time of 10 months. Fast forward in time a bit to the recession of July 1990, that was preceded by an inversion in December 1988, and this gives it a lead time of 7 months. So I'm sure that you can see that the lead times vary,
and there's one quite noticeable pattern about all of these inversions, which we'll talk about soon. I'm going to give you a clue, the recessions do not occur while the curve is inverted. There's three more recessions that we need to look at to get the timing on, so the 2000 recession had a lead time of 13 months from inversion to recession. The
housing bubble recession was 23 months, and the 2020 pandemic was 6 months. Our recent inversion came in June 2022, which means we have now waited 31 months and still not seen a recession. So is it coming or is it going to be like the next GTA where people say it's going to come? But it never
does. Well we need to understand the mechanics behind the inversion and the recession a bit more.
到來？嗯，我們需要更深入地了解倒掛和經濟衰退背後的機制。
01:55
The problem that we have now is actually not that the yield curve has inverted, the real problem is that the yield curve has just uninverted or exited the inversion, and every recession apart from the first two occurred when the yield curve had uninverted. This is why they say that the danger
zone is often the exit, not the inversion. Just like in 2000, the curve steepened and the recession hit. In 2006, the curve steepened and the global financial crisis followed, and in 2019, the curve normalized and the COVID recession followed. The reason why our lead time has been so long,
this time round between inversion and recession. While no one knows for sure, this is not a sweet and pure science, but what certainly contributes to the length is the fact that we had a really long inversion. It stayed inverted for an extended period of time 26 months to be exact,
between inversion and the exit. This is longer than any cycle on record. The first problem is the longer the inversion, the higher probability that something breaks in the economic system, and the second problem with the recent inversion was that it went quite deep. It went all the way
down to minus 1.06, which is the deeper the inversion, they say the worse the recession is.
下降到負1.06，他們說倒掛越深，經濟衰退就越嚴重。
03:12
So that's the potential situation that we face today, a big recession, and a high probability that something breaks if we go by what is traditionally thought about the exit or the uninversion of the yield curve. I know I know that's super positive, right? This is definitely
not the feeling that you get when the yield curve uninverts, that's for sure. But now that we have a bit of an understanding on the length of time between an inversion and a recession, and that we understand the bigger the inversion, the bigger the potential recession, let's try to understand the system behind why an inversion normally comes with a recession.
At its core, the 10 year minus 2 year yield curve signals a recession because it captures how money, credit and expectations flow through the economy. Not because it's magical, what the yield curve is doing is it's reflecting future growth expectations.
In a normal functional working economic system, long-term bonds yield more than short-term bonds.
在一個正常運作的經濟體系中，長期債券的殖利率高於短期債券。
04:10
Why? Because normally investors demand extra return for time, inflation and uncertainty.
為什麼？因為通常投資者會要求額外的回報，以補償時間、通膨和不確定性。
04:16
But when that flips, it means that investors are accepting lower long-term yields than short-term ones. This only happens when markets expect slower growth and future rate cuts.
To put simply, the bond market is saying that the economy will be weaker in the future than it is today. So when this yield curve inverted in July 2022, we had really high short-term interest rates that were above neutral. This means that the Fed policy was intentionally tight.
So the Fed was creating higher borrowing costs, reduced investment, delayed projects and inducing corporate caution. Yes, the economy keeps moving until the lag effects hit.
And at this stage, investors are happy to lock in a lower long-term rate if it means that they can keep their money safe. But they will only accept a short-term rate if it is very high.
在這個階段，如果能確保資金安全，投資者樂於鎖定較低的長期利率。但他們只會在短期利率非常高時才接受。
05:08
Because then they are taking on added risk with less certainty. So that behaviour implies lower confidence in future risk assets and a reduced appetite for expansion and leverage.
Now I know that some of you watching this video will say that this time is going to be different.
我知道有些正在觀看這部影片的人會說，這次會有所不同。
05:23
It will be argued that the yield curve does not work anymore, their interest rates are fake now, that everyone knows about this chart already, so it can't work anymore. And it sounds smart, but here's why they might not necessarily be right. The yield curve is just a bet. Big investors like pension funds, banks and insurance companies are placing huge bets on the future. They are
會有人爭辯說，殖利率曲線不再有效了，現在的利率是假的，每個人都已經知道這張圖表了，所以
05:43
asking, will the economy be strong in the future or will it be weak? In the yield curve, it has two key rates. The short-term rates are what the Fed controls now and the long-term rates are what investors think the future will look like. When long-term rates go lower than short-term rates, investors are basically saying things are going to get worse and the Fed will have to cut rates later.
Money printing does not necessarily break the inversion graph because even if the Fed prints money buys bonds and sets short-term rates, they cannot control what millions of investors believe about the future. People with real money at stake don't just follow a chart, they protect themselves.
So you can imagine that the Fed is a weather forecaster saying sunny all year round and the bond market is millions of people buying umbrellas anyway. Who do you trust? I would say that most experts would trust the people who buy their umbrellas. Okay and the third main argument
against this graph is that because everyone knows about it, it doesn't work. While knowing about a signal does not cancel it, even though everyone knows that speeding causes crashes, crashes still happen. Why? Because people can't just stop the cycle, you can't stop the sun from rising every day.
The yield curve works because it reflects fear about the future, not because it's a secret.
殖利率曲線之所以有效，是因為它反映了對未來的恐懼，而不是因為它是一個秘密。
06:57
As long as people invest real money, businesses borrow and banks land, which they will, there's a strong argument that this signal does not stop working. So that brings us to the market that we are in in 2026. This year is a unique market and we have to take this into account when talking
about the inverted yield curve. No market has ever experienced AI before. How does AI impact the market? Does it see the stock market growing at a parabolic rate because AI improves productivity?
Or does it do exactly what tech did, which it saw parabolic growth? Yes, the market has made a lot of people rich these past 30 years. But first we saw the great dot com bubble collapse.
Hopefully for our sake, there is no AI collapse coming. Of course, economists and strategists have identified AI investment and adoption as a key force shaping productivity in corporate earnings in 2026. But that's exactly what they said for tech in 1999. The other thing that we have
that's in favor of the market is the shift in monetary policy. Of course, we all know that Jerome Powell, the Federal Reserve Chair has his term ended in May this year. Warren Buffett, he personally loves Jerome Powell and the way that he's managed the Fed. But Donald Trump,
well, let's just say he's not in favor of the guy.
嗯，我們只能說他並不喜歡這個人。
08:11
People aren't able to get good mortgages. They're paying too much because of Jerome too late, Powell. He's done a bad job. No, he's got a meeting today, but I call him too late. You know, he's always too late. Whether you like Jerome Powell or not, the Fed policy has to shift a recently. Inflation is cooling and this gives central banks more flexibility leading to easing
and gradual rate cuts rather than aggressive tightening. Obviously in 2025, they cut interest rates three times and in 2026, the Fed members project future rate cuts of one in 2026 and the another rate cut in 2027. So they are projecting that they will not lower rates quickly. They
will do it at a very slow and gradual pace. But there is going to be a new Fed chairman in 2026 and depending on who gets the job, it will affect the monetary policy. Obviously, if they pick Donald Trump's right hand man, Scott Besant, he's probably going to lower rates as quick as the
good predictor of outcomes thinks the most likely chair nomination will be one of the Kevin's either hassets or wash. And because of this, people are predicting that the Fed will lower rates quicker than they said, either two interest rate cuts three or four this year. So
that's a lot more than what they said. And these are the most likely outcomes as per polymarket.
這比他們說的要多得多。而根據Polymarket的數據，這些是最有可能的結果。
09:28
So along with the impact of AI and the easing of monetary conditions, this may help ease the fears of a potential recession due to the exit of the yield curve. But I'm not fully buying it yet.
You know, people often say that if you push interest rates down, the economy will go up.
你知道，人們常說，如果你降低利率，經濟就會好轉。
09:44
However, often the reason why you push interest rates down is precisely because the economy is not doing so great. Chet GPT, which you know, trust it however much you want, tells us to think of the Fed like an ambulance. If the ambulance shows up, someone has already heard the ambulance
does help, but it doesn't prevent the accident. Rate cuts are a treatment, not a prevention, it says. Which, you know, this argument does make some sort of sense because if you think back in 2020, they didn't lower interest rates and flood the economy with money because the economy was
doing great. No, they did it because the economy was going to collapse with the shutdowns if they didn't make a move. Let's talk a bit of positive news with regards to the sponsor of this video.
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And today's sponsor, the first of 2026, is heavily involved in this. Telescope innovations, Tekka TE, LIF on the OTC in the US, is available with Schwab, Interactive Brokers, Fidelity, E-Trade, and many others. They have a two-time Noble Prize winner in chemistry involved,
multiple previous exits in this ferry industry, they're generating revenues already, and have 15 of the 20 largest farmer companies as clients. In today's world, OneDrive requires up to 30,000 experiments to develop. A quality chemist is able to conduct roughly five experiments per week.
Telescope innovations, new physical AI, self-driving lab, which was launched on December 9th, 2025, can execute a year or more's worth of traditional lab work in a single week.
It does this by leveraging robotics and analytical technology and AI to optimize experiments.
它透過利用機器人技術、分析技術和人工智慧來優化實驗，從而實現這一點。
11:32
This is a product that was launched into the world stage for the first time ever, and as far as I'm aware, has no meaningful competitors that offers anything like this.
這是一個首次在全球舞台上推出的產品，據我所知，目前沒有任何有意義的競爭對手能提供類似的產品。
11:41
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This technology helps solve a multi-billion-dollar bottleneck because, today, with a conventional lab, it can be very slow and costly. First, a company files a patent on X-Date. It typically faces a 10-year lead time to develop and commercialize the product. Development costs can reach
900 million during this time, and that leaves only 10 years to monetize the invention under patent laws before expiry. Telescope innovation's self-driving lab is a different story. With this, a customer utilizes telescope's self-driving lab and files a patent on X-Date. Management
projects that years can be shaved off the total time to market. They estimate that SDL can reduce development time by 30%. This efficiency would add years of high, major monetization under patent laws. As you can see with the self-driving lab,
it potentially saves up to 600 million in costs per drug, which is almost two-thirds cheaper than a conventional lab. On top of this, telescope innovations has already commercialized its direct-inject LC, which 15 of the biggest 20 pharmaceutical companies in the world already
use, because it gives real-time data on what's occurring inside a chemical reaction.
正在使用，因為它能提供化學反應內部正在發生的即時數據。
13:11
So this is why they've started to develop some very strong revenue and it's growing, so do your own due diligence on telescope innovations ticker TLIF.
But now let's finish this off with why the yield curve still matters despite people saying this time is different. Every cycle has a reason to dismiss the inverted yield curve. This time round, we can look at AI and say the increased productivity from AI will ensure that we don't see a recession.
We can look at easing monetary policy and say this will guarantee there isn't one.
我們可以看看寬鬆的貨幣政策，並說這將保證不會有經濟衰退。
13:41
Or we can simply look at the time since the un-inversion of the yield curve and say it's been too long, we have now bypassed the recession and the worst is behind us.
For me, the last argument would be the strongest of the three. But one thing that we do need to know is that every cycle in the past has had a reason to dismiss a recession too. In 2000, people said tech growth was so high, so there's no way a recession can come. In 2006, people said
housing was too strong, you can't break that. In 2026, it's AI and it's the fed, easing monetary policy. Yet, this curve has never been wrong since 1976, it's outlived narratives, presidents and policy regimes as not an emotional indicator as driven by trillions of
