U.S. Markets close in 5 hrs 3 mins

Who Will the Recession Hit Hardest? (Once Again, It’s Not Looking Great For Millennials.)

Say Contributor

The increasing precarity of the bond market seems to signal that a recession is coming, which, growing research shows, is especially bad news for millenials. Breaking Bonds First, a quick recap. As we’ve said before, the slowdown of China’s economy and the effects of President Donald Trump’s Chinese tariffs has economists worried about a recession. One of the biggest indicators of a recession is that the bond yield curve is inverted. Bonds are, put simply, a loan you give the government, and one of the safest investments you can make. But when the bonds that give a quick return on investment rather than a long-term start appearing as safer bets to analysts, that means the yield is inverted because a downturn seems to be approaching. Got it? Low Down The bond yield curve inverted even further today, according to CNBC, as the ten-year rate fell below the two-year rate, which means that at the moment, traders think a bond that pays out in two years is a safer bet than one that pays out in ten. A recession has followed the last 5 yield curve inversions, and the last time the yield inverted was the very beginning of the 2008 economic meltdown. Millennial Tension Though a recession would affect most Americans in some way, more research is showing millennials would suffer the most. The demographic that came of age during the 2008 recession seem especially ill-prepared to weather another one. As noted by The Atlantic, people between the ages of 22 and 38 graduated into a historically bad job market and were never able to build up sufficient savings. Millennial homeownership is 8% lower than previous generations, their collective student debt sits at $1.5 trillion, they own significantly less stock than Generation X did at their age, and their household net worth is 40 percent lower than for Gen X households in 2001. It’s been tough enough for them to make up lost ground as it is, and another recession, some fear, could make it impossible. -Michael Tedder Photo by Adobe