Inverted Yield Curve


An inverted yield curve is when the yields on bonds with a shorter duration are higher than the yields on bonds that have a longer duration.It often signals a lead-up to a recession or economic slowdown.

Because yield curve inversions are rare, they typically attract attention from the financial world when it happens.The yield curve is a graphical representation of the relationship between the interest rate paid by an asset (usually government bonds) and the time to maturity.The yield curve is also known as the term structure of interest rates.The interest rate is measured on the vertical axis and time to maturity is measured on the horizontal axis.


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