What is Inverted yield curve?
An inverted yield curve is when short-term government bonds pay higher yields than long-term ones.
It usually happens when investors expect the Federal Reserve to cut rates in the future, often because they expect the economy to weaken.
Why it matters to you
Historically it has been one of the more reliable recession warning signs, but recessions have come with long and varying lags after inversions.
FAQ
What is Inverted yield curve?
An inverted yield curve is when short-term government bonds pay higher yields than long-term ones.
Does an inverted yield curve always mean a recession?
No. It has a strong track record, but it is a warning sign, not a certainty, and the timing is unpredictable.
All plain-English definitions → · Educational only, not investment advice.
