inverted yield curve


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Related to inverted yield curve: Normal Yield Curve, Flat Yield Curve

inverted yield curve

An unusual market condition in which long-term US Treasury bonds yield less than short-term US Treasury bonds. It is often regarded as an indicator of imminent recession.
References in periodicals archive ?
On a flattening,or inverted yield curve, Powell said it's typical for the curve to flatten as the economy strengthens, but it's not likely a harbinger of a recession currently.
An inverted yield curve means investors expect slow economic growth, low inflation and interest rate cuts.
Historically, an inverted yield curve has been a good indicator that the economy is slowing and a recession could be on the horizon.
That's why an inverted yield curve has come to be a pretty reliable indicator of an imminent end to a cyclical expansion.
An inverted yield curve almost always leads to a recession.
The rule of thumb is that an inverted yield curve (short rates above long rates) indicates a recession in about a year.
An inverted yield curve signified pessimism in the markets.
It demonstrates that the occurrence of yield curve inversion is an off-equilibrium phenomenon after an adverse shock in the adjustment process of interest rates and output, and that an inverted yield curve may lead, but does not lead to, a recession.
While an inverted yield curve has proceeded every post-WWII recession, the steepening of the yield curve we've seen over the past 18 months is similar to what happens in anticipation of an economic recovery.
The problem is that demand is unlikely to increase much unless an even steeper inverted yield curve than we have had for some time allows lenders to offer long-term fixed rates well below the cost of shortterm fixed rates," he said.
At some point in the future the inverted yield curve currently in place in the capital markets will return to a more normal distribution.
Longer-term bonds typically pay more, but not when there is an inverted yield curve.