Question: Use the following case study at this link in order to answer the questions: https://drive.google.com/file/d/1XBXiMOdjazdDhUNelYJW1kDlr7LGFxA2/view?usp=sharing - Estrella (NY Fed) is quite certain that the yield

Use the following case study at this link in order to answer the questions:

https://drive.google.com/file/d/1XBXiMOdjazdDhUNelYJW1kDlr7LGFxA2/view?usp=sharing

- Estrella (NY Fed) is quite certain that the yield curve is a good predictor of future economic activity. From the case, or the link to his FAQs, answer the following questions:

- How successful is the yield curve at predicting recessions?

- What matters most the level of the term spread, the change in the spread, or the level of short term interest rates?

- Discuss why a yield curve inversion should lead to a recession.

- D. Berner (Morgan Stanley) is a bit more skeptical about the predictive power of the yield curve. Does he just not understand Estrellas overwhelming evidences, or does his skepticism rest on solid reasoning?

- How is the U.S. yield curve currently sloped? What does it affect your forecast of economic activity?

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