Inverted Yield Curves And The Rule Of Four

A couple of things happened last week that entrepreneurs need to understand. Both foretell of a coming recession.

Interest rate yields are normally a matter of time. Longer notes demand higher interest rates than shorter ones.

For the first time in recent history, 2 year notes are demanding a higher interest rate than 10 year notes. Why? Because investors expect substantial economic problems in the short term versus the longer term.

This is what bankers call an Inverted Yield Curve. It’s one of the signs financiers use to predict recessions.

Another one of those signs is called the Rule of Four. It’s the fact that before each of the recessions in recent history, unemployment was below four percent, and inflation was above the same number.

Once again, this is also true.

I’m warning all of you to be ready. You can talk about the War in Europe, supply side problems, even the Fed response, but it all adds up to one thing.

Tough times ahead.

You need to be sitting on as much cash as possible. If there’s any fat in your payroll, you need to deal with it. If inflation has eaten into your margins, you need to deal with that as well.

Recessions are all about one thing only. Making it through.

Let me leave you with this.

I filed the majority of the April 18th extensions this morning. If you’re a client of mine, a copy of the extension will be coming to you as soon as we have the time to mail them out.

If you would like to make a tax deposit with your extension, you may do so at

Or you may contact our offices at your earliest convenience. If you’re not a client of ours and would like us to file an extension on your behalf, please contact us today.

We’re all going to get through this. Let’s get through it together.

Accounting Solutions Ltd. stands ready to complete our mission and purpose of protecting you, your family, and your business. Whether you need Employee Retention Credits, Payroll Services, or Accounting and Tax Work, you have but to ask. I’m here and I remain,

Sincerely yours,

Chris Amundson
Accounting Solutions Ltd.

Note that the only professional services provide by Accounting Solutions Ltd. are those specified in a written communication from our office detailing the scope of services to be rendered and the terms and conditions applicable to the engagement.