This is a critical distinction at a time when the Fed is contemplating not only ending its rate hike cycle - and thus curve flattening impulse - but potentially cutting rates, at least if it agrees with the market, as soon as late 2019, which in turn would prompt a sharp spike in the yield curve and, as we argued in our post explaining why the Fed is trapped, catalyze the next recession.

And with market-derived recession odds within the next year recently surging over 60% according to JPMorgan...