inverted yield curve


Also found in: Financial, Wikipedia.
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.
Dictionary of Unfamiliar Words by Diagram Group Copyright © 2008 by Diagram Visual Information Limited
References in periodicals archive ?
Instead, equity investors, nervous about the economic impact of the trade dispute with China and the recession indication of the inverted yield curve, reduced exposure in favor of less volatile investments.
"But a slowing economy with an inverted yield curve are a less-than-ideal environment for Financials, and sell-side analysts relative pessimism on the sector reflects this.
He noted the inverted yield curve and said that's not a good place to be.
Following the results of the latest PIB auction (cut-off yields for 5yr/10yr bonds falling 25/40bps to 13.55/13.15%), we draw conclusions for monetary policy based on the inverted yield curve (yield spread between 3yr and 10yr widened to 110bps vs.
Investors worry if this inverted yield curve remains inverted, a recession is more likely within the next two years.
The decline in Dow was seen as an "inverted yield curve," which occurs when the interest rates on short-term bonds are higher than the interest rates paid by long-term bonds.
An inverted yield curve happens when longer-term government bonds yield less interest than shorter term ones.
The scenario, known as an inverted yield curve, has preceded every recession since 1955 and offers a sign that investors are piling into safer assets.
Searches on Google for "inverted yield curve" have spiked after the unusual bond market phenomenon presented itself last week for the first time in over 12 years and helped tank Wall Street amid chatter that an economic downturn was imminent.
An inverted yield curve often causes a lot of concern, but it need not be a harbinger of doom.
These two reasons also distort the traditional US economic signalling function of an inverted yield curve for Treasuries -- a hypothesis that was supported by high-frequency data that pointed to a healthy consumer, the main driver of growth in the US.
In the United States, an inverted yield curve is historically a leading indicator of an economic recession.