The bond market's notorious indicator is correctly signaling a coming recession, and the Fed has made a major mistake, the economist who coined the inverted yield curve says

• The bond market's notorious recession gauge is likely correct, according to Campbell Harvey.
• The Duke professor popularized the 3-10 Treasury spread as a recession indicator in 1995.
• The gauge has never flashed a false positive - and it's likely saying the Fed made a big mistake, Harvey said.

The inverted yield curve is still correctly signaling a recession even as optimism grows for a soft landing – and the Federal Reserve is making a major mistake in its war against inflation, according to the economist who popularized the bond market's notorious economic indicator.