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Illustration: Lazaro Gamio/Axios

The difference between the yield on 10-year Treasury notes went further below the yield on 3-month bills Wednesday. The difference is the most since 2007 and suggests that the inverted yield curve may not be going away.

Why it matters: Since the 1970s, an inverted yield curve has preceded every U.S. recession. However, economists, fund managers and other experts have been waving off the inversion's importance so far this year in a way that's eerily familiar.

What they said before: When the yield curve inverted in January 2006, in much the way it has this year, former Fed Chair Ben Bernanke said not to worry. "In previous episodes when an inverted yield curve was followed by recession, the level of interest rates was quite high, consistent with considerable financial restraint," he said in a speech in March 2006. "This time, both short- and long-term interest rates — in nominal and real terms — are relatively low by historical standards."

  • Bernanke's predecessor, Alan Greenspan, labeled it a false indicator, noting that long-term yields were being held down by heavy investor demand, just as they are now.
  • The Wall Street Journal's Greg Ip wrote in January 2006 that it was foreign buying of U.S. bonds and exceptionally low yields on U.S. Treasuries (then about 4%, compared to today's yields which are closer to 2%) that was causing the inversion.

Yes, but: It wasn't just 2006 when experts were certain things were different this time.

  • "We said the same thing in 2000," Bank of America trading strategist Gerald Lucas quipped to the FT in January 2006, while noting that "the inversion was the result of scarcity value at the long end of the curve to do with Treasury buybacks."

Be smart: The experts also insisted that economic data was strong and the usual recession warnings signs — other than the inverting yield curve — simply weren't there.

  • "I think it sometimes portends a recession, sometimes not," said Marshall E. Blume, a finance and management professor at the University of Pennsylvania's Wharton School. This time, it probably does not, he added in 2006.
  • "All the forecasts are quite favorable. There aren’t any real excesses in the economy at the current time."

Go deeper ... Economic whiplash: Stocks are rising, but analysts still fear a recession

Go deeper

34 mins ago - World

Scoop: Israel launches maximum pressure campaign against Ben & Jerry's

A Ben & Jerry's store in the Israeli city of Yavne. Photo: Ahmad Gharabli/AFP via Getty

The Israeli government has formed a special task force to pressure Ben & Jerry's ice cream and its parent company Unilever to reverse their decision to boycott Israeli settlements in the West Bank, Israeli officials tell me.

Why it matters: The Israeli government is concerned the move by Ben & Jerry's will encourage other international companies to take similar steps to differentiate between Israel and the West Bank settlements. A classified Foreign Ministry cable, seen by Axios, makes clear the government wants to send a message.

Video game developers at Activision Blizzard say they'll walk out Wednesday

Illustration: Shoshana Gordon/Axios

Employees at Activision Blizzard will hold a walkout Wednesday in protest of widespread harassment allegations across the company, a spokesperson on behalf of the group told Axios.

Why it matters: Walkouts are a drastic measure for developers in a largely non-unionized field, a testament to just how angry employees currently are.

Updated 2 hours ago - Politics & Policy

Atlanta-area spa shooter sentenced to life without parole

The Gold Spa, one day after a gunman shot and killed eight people at three separate Atlanta spa locations. Photo: VIRGINIE KIPPELEN/AFP via Getty Images

Robert Aaron Long, 22, of Georgia, was sentenced Tuesday to life without parole after pleading guilty to murder and other charges related to a series of deadly spa shootings in Atlanta, AP reports.

The big picture: Cherokee County Superior Court Chief Judge Ellen McElyea accepted the plea deal, and Long was given four life sentences after a prosecutor said investigators found no evidence of racial bias.

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