The yield curve is a line showing the interest rates (yields) on government bonds from short to long maturities.
Normally, longer-term bonds pay more than short-term ones, so the curve slopes upward. When short-term yields rise above long-term yields, the curve is 'inverted'. Common comparisons are the 10-year versus 2-year Treasury, or 10-year versus 3-month.
Why it matters to you
An inverted yield curve has preceded most US recessions in the past 50 years, though the timing varies and it is not a guarantee.