USD: Oxford recession signal meets strong spending as 10Y yields top 5.2%

A US recession indicator compiled by Oxford Economics has flashed a warning signal, but current data, particularly consumer spending, shows no sign of cracking. The source reports no price move, pip figure or levels. The signal arrives as 10-year Treasury yields sit above 5.2% and odds of a Federal Reserve rate hike are rising. That gives Treasury bulls a counterargument against the prevailing narrative of economic strength and tighter policy. However, Oxford Economics itself plays down the signal, and incoming data points in the opposite direction, so the source expects little immediate market reaction. For USD traders, the main drivers remain resilient spending, elevated yields and building Fed hike expectations, which continue to support a firmer policy outlook. The recession signal is a factor to monitor if future data begins to soften. For now, it is unlikely to shift expectations on its own.