These people are so silly. The yield curve has not been good at anticipating declines since the interventions during last financial crisis threw everything out of whack for a decade and it has flashed tons of false warnings, which is why a lot of Very Smart People stopped taking it seriously.
The yield curve is not some crystal ball that can detect pandemics and panicked responses from governments. This did not “pull the business cycle” forward. It is 100% a man-made financial crisis and it’s going to take some phenomenally creative and expensive policy decisions to get us out. The yield curve did not tell you that all businesses would grind to a halt, that airlines would be trading like penny stocks, that banks would see their valuations sliced in half.
If you want to take any lesson from this episode, it’s that the number one risk in the financial markets is political risk. Because now even in western democracies the government can destroy your company on a Sunday-evening whim. It’s not just for Communists anymore.