'Technically we did not have a yield curve inversion'

White House trade advisor Peter Navarro disputed that the bond market flashed a recession signal last week, which spooks investors and feels the stock market tumbling.

The yield on the benchmark 10-year Treasury note briefly fell below the 2-year rate on Wednesday, a phenomenon in the bond market known as yield curve reversal, which is typically taken as a sign that a recession is on the horizon.

Navarro, however, disputed this: "Technically, we did not have a yield curve reversal," he said in an interview on CNN.

The White House trade advisor called it "flat curve" because the spread was too narrow. The yield on the 10-year Treasury benchmark dropped to 1.623% on Wednesday, close to 1.634%.

"An inverted yield curve requires a big spread between the short and long," Navarro said. "All we have had a flat curve.

Investors, however, did not seem to interpret the yield curve that way on Wednesday. The Dow Jones Industrial Average dropped 800 points or about 3% in its worst performance of 2019 as investors grew spooked over the U.S. economy.

Navarro said that the yield curve is a positive signal on the economy. He said that the capital is coming into the bond market due to the strength of the Trump economy, which is bidding up on the long run and bidding down yields, which is said to be the flat curve.

"In this case, the flat curve is actually the result of a very strong Trump economy," he said.

Navarro sees a bullish case for the U.S. economy this year. He said the Federal Reserve needs to embark on a lower rate of return on the end of the year, which will lower yield on short term bonds.

The Chairman of the Board, Chairman and CEO Jerome Powell, Chairman of the Board, Chairman of the Board, said: longer cycle of slashing interest rates.

Powell, during his press conference, said the U.S. economic outlook remains favorable to the Fed's decision to cut rates of global economic growth and trade policy uncertainty. He said businesses are more cautious about capital spending due to the ongoing uncertainty.

Navarro, however, disputed that the trade war was having an impact on the economy, pointing to the Fed.

"The Federal Reserve chairman should look in the mirror," Navarro said.