The Sahm rule is based on history and works 100%… until it doesn’t.

The yield curve was basically infallible as well, so declaring we are headed imminently towards recession could be wrong. While a bit lonely today, I shall stay in the higher for longer camp. For example, on July 5, 2022, when the 2-year and 10-year yields began to slope downward, recession was all but guaranteed within 22 months. But as of August 2024, the curve has been inverted for over two years without a recession occurring.