Inverted Yield Curve

The Inverted Yield Curve is an unusual market condition where the yields on short-term government debt instruments, such as the 2-year U.S. Treasury note, are higher than the yields on long-term debt instruments, such as the 10-year U.S. Treasury bond, signaling that investors anticipate an economic slowdown or recession in the near future. This inversion, most commonly measured by the spread between the 10-year and 2-year Treasury yields, is a historically reliable, though not infallible, predictor of future economic contraction.