{"status":"ok","message-type":"work","message-version":"1.0.0","message":{"indexed":{"date-parts":[[2026,8,14]],"date-time":"2026-08-14T22:35:43Z","timestamp":1786746943669,"version":"build-2736575974"},"posted":{"date-parts":[[2026]]},"group-title":"SSRN","reference-count":0,"publisher":"Elsevier BV","content-domain":{"domain":[],"crossmark-restriction":false},"short-container-title":[],"abstract":"<jats:p>Using a monthly panel covering June 1976 through April 2026, we document that essentially all of the yield curve inversion's historical predictive content for BAA-AAA credit-spread widening is attributable to the 1978-1982 Volcker disinflation. Of 94 inversion-months in the full sample, 39 fall within this five-year episode; 30 of those 39 were followed by \u226510bp BAA-AAA widening within six months. Of the remaining 55 inversion-months-seven before Volcker or between Volcker and September 1997, and 48 after September 1997-only three were followed by such widening. A standard probit interaction between the inversion indicator and an ex-ante credit-stress tercile is statistically significant at the 5 percent level under non-robust maximum-likelihood standard errors but fails to reach significance under Newey-West (p = 0.17) or year-clustered (p = 0.23) standard errors. A Quandt-Andrews test identifies a structural break in September 1997, but this break is better understood as the point at which the sample begins to contain the cumulatively weaker post-Volcker data rather than as a change in an otherwise-stable relationship. We interpret these findings as evidence that the yield curve inversion's well-known reputation as a leading indicator of corporate credit conditions rests on a single historical episode, and is not operational information for practitioners in contemporary markets.<\/jats:p>","DOI":"10.2139\/ssrn.6639799","type":"posted-content","created":{"date-parts":[[2026,4,24]],"date-time":"2026-04-24T13:45:42Z","timestamp":1777038342000},"source":"Crossref","is-referenced-by-count":0,"title":["The Volcker Signal"],"prefix":"10.2139","author":[{"ORCID":"https:\/\/orcid.org\/0009-0005-8477-9393","authenticated-orcid":true,"given":"Boon Chuan","family":"Lim","sequence":"first","affiliation":[],"role":[{"vocabulary":"crossref","role":"author"}]}],"member":"78","container-title":[],"original-title":[],"deposited":{"date-parts":[[2026,8,14]],"date-time":"2026-08-14T22:08:13Z","timestamp":1786745293000},"score":1,"resource":{"primary":{"URL":"https:\/\/www.ssrn.com\/abstract=6639799"}},"subtitle":[],"short-title":[],"issued":{"date-parts":[[2026]]},"references-count":0,"URL":"https:\/\/doi.org\/10.2139\/ssrn.6639799","relation":{},"subject":[],"published":{"date-parts":[[2026]]},"subtype":"preprint"}}