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INVESTMENT INSIGHTS Is the recession obsession justified? We don't think so. Here's why we're recommending investors maintain a balanced and strategic approach. Something strange happened toward the end of the summer—the word "recession" re-entered the mainstream. From reading the headlines, some may have wondered if we were in a recession already. According to Google, the word "recession" has only been searched more during the global financial crisis (Exhibit 1). This re-emergence is not without an explanation: Markets and economic data are showing some troubling signs. U.S. 10-year yields fell by almost 50 basis points in August (the third most dramatic monthly fall since the global financial crisis) and are now hovering at around 1.50%. This by itself is worrying. It suggests that investors are more pessimistic about future growth. But the most acute cause for concern is that the spread between 10-year Treasury yields and 2-year Treasury yields was temporarily inverted in August. That means that investors earn less for lending money for a longer time. Historically, an inversion of the yield curve has been a reliable indicator that a recession was imminent. EXHIBIT 1: RECESSION AND YIELD CURVE HAVE ENTERED THE MAINSTREAM Google trend index (max = 100) Source: Google. August 31, 2019. INVESTMENT AND INSURANCE PRODUCTS ARE: • NOT FDIC INSURED • NOT INSURED BY ANY FEDERAL GOVERNMENT AGENCY • NOT A DEPOSIT OR OTHER OBLIGATION OF, OR GUARANTEED BY, JPMORGAN CHASE BANK, N.A. OR ANY OF ITS AFFILIATES • SUBJECT TO INVESTMENT RISKS, INCLUDING POSSIBLE LOSS OF THE PRINCIPAL AMOUNT INVESTED For Informational/Educational Purposes Only: The author's views may differ from other employees and departments of JPMorgan Chase & Co. Views and strategies described may not be appropriate for everyone, and are not intended as specific advice/recommendation for any individual. You should carefully consider your needs and objectives before making any decisions, and consult the appropriate professional(s). Outlooks and past performance are not guarantees of future results. Please read Important Information section.

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